Could someone point me in the right direction of some books/resources/people to contact? I would like to learn more -- thanks
What exactly are you referring to? One of the things that might help is the procedure used to perform event studies in, among others, behavioral finance.
Sorry guys for being so vague, what I am really referring to, are hedge funds strategies. What form do most of their event based strategies consist of? Is this the kind of trading that a regular online investor can engage in? I think it makes more sense as an online investor to bet on one time events, as opposed to everyday trading, where market fluctuations are harder to predict. I hope this clarifies my frame of mind in asking the question. Thanks
You need two books: Merger Arbitrage - Thomas Kirchner http://www.amazon.com/Merger-Arbitr...=sr_1_1?ie=UTF8&s=books&qid=1263257021&sr=1-1 Risk Arbitrage - Guy Wyser Pratt http://www.amazon.com/Risk-Arbitrage-Wiley-Investment-Classics/dp/0470415711 PM me for more info
Events are one of the items in my overall trade plan. Events to me are earnings, splits, conferences, product announcements, etc., some upcoming item that drives investor/trader interest. The way I play it is to consider getting in at some quiet time prior to and get out before. The old saw is to "buy the smell", "sell the news". But I think it is "sell BEFORE the news" The recent run-up and then drop in GOOG with their phone introduction, is an example of what I mean.
Larry, Some event based trading catalyst ideas: Trading Catalysts: 1-unscheduled news 2-scheduled news 3-machine readable news (see next post) 4-inside the response to news (reaction of CBT interest rate futures to the employment report) 5-transitory correlations 6-potential trading opportunities slow response to news delayed response information cascades
http://www.securitiesindustry.com/issues/19_104/-23976-1.html?zkPrintable=true http://www.dj.com/collateral/files/DJ-algo-solutions-3441.pdf http://www.toomre.com/Dow_Jones_XML_News_Feed