Looking for capital partner / buying power

Discussion in 'Hook Up' started by clavell, Nov 29, 2019.

  1. clavell


    Have a fully hedged pair trading strategy that requires buying power on CME. Willing put up modest first-loss capital (enough to cover any losses). Can start small then grow.

    BP can be in cash, or in existing stock portfolio. Willing to use your current broker/clearing firm on futures leg of the trade. The other leg is not a future. Net returns appx 8%-14% annual on cash.
  2. trend2009


    what pairs do you trade?
  3. clavell


    It's one pair - the pair is the strategy and could be disclosed to serious parties after an NDA. The strategy yields 8-14% on cash - thus capital up has to be substantial for it to make sense to do. Can start small to demonstrate. For more details -feel free to PM
  4. 8% to 14% net return on capital sounds sweet, how much cash is needed to make this strategy work?
  5. destriero


    You need equity and index (futures) BP; so in no way is this remotely an arb. So the backer produces cash after an NDA? For 8%?

    Let me guess... you have no track record, but can produce a fantastic backtest. Dude, go away.
  6. clavell


    "1 full-pair lot" would require approximately 300k.
  7. trend2009


  8. gaussian


    Mirroring the S&P and no mention of drawdown, sharpe, or anything else.

  9. clavell


    more details can be shared after NDA - this is a fully hedged pair trade (or as close a can be) - the PNL is locked in at the inception of the trade. Think of it a a delta neutral trade.
    the volatility is high - and the risks are a margin call - in which case the trade must be closed out (hasn't happened so far). For this case, I am willing to put up my own first loss capital.

    Again, for seriously interested parties - the trade will be disclosed, after an NDA and not for all world to see.

    Re mirroring the S&P: returns on S&P vary. Now they are high.
    This trade is locked in.

    BTW, a flavor of this trade (somewhat akin to a buy-write) can be done to beat S&P by ~appx 1% every-time. But if S&P is down, the strategy will be down too (but 1% less down).

    The market conditions making such trades possible will last probably a few years until the margins narrow.
  10. Bum


    So if I'm reading this correctly, your strategy is good for 1%.

    The 8-14% is based upon the annual return of the S&P and not from your strategy?
    So if the S&P is down 8% next year, your return will be -7% ?

    Am I reading this correctly?
    #10     Nov 29, 2019