Great point, BillyBob the piker guy!! If doing overnights with spreads, I would not be able to sleep without having the risk spread out as wafer thin as possible whilst somehow simultaneously avoiding the exorbitant haircut on the crazy capital required to finance these great quantities of pairs. Yeah, and if you are actively trading it intraday, at least some sort of grey-box spreadsheet will keep you from going blind, psycho or both (actually, maybe blind and crazy is better than still being able to see so that you are only tormented by what you hear or smell and not what you see?) Anyway, seems a valid hedge fund strategy to me.
Ammo, Thank you for taking the time to post an explanation of your strategy. Without sounding confrontational why were the majority of your public trades (ES Journal Activity) on the short side ? Would not it be wiser to do the above with the help of the predominant trend ? Cheers.
I have a friend who used to be the FX head at one of the biggest European hedge funds. His boss was very bullish on financials throughout 2008 and kept buying and adding to his longs. In fall 2008, the financial collapse forced him to cover his positions. All is left of that hedge fund today is the HF Manager and 2 rookie traders who execute orders for him.
no heat , fseit posted the reasson perfectly,an overnite position in this market is not likely to blow up to the upside but the chance of dropping 30 or more overnite is profitable if u are short,very costly if your long,the cost of an overnite short opening against u 8 points isnt great but its manageable