Questions to The Trader Profit

No automation, although I have access to some programs I paid to have written. I just haven't employed them yet---well, I did but they cost me money.

 

TheTraderProfit,

What opportunities do you see in the market today? Where do you think the edge is? Do you think that the risk arb game is dead? Or, is there money to be made there?

Mike

 

There's lots of opportunity in the risk arb game.

So many mergers, so little time.

I like bank deals because the antitrust aspects are easy to figure out.

 

Let me also add that I like to watch secondary offering stocks.

When they break the secondary bid they often fall precipitously.

This is known as the "break, shake, and take."

I like to try to anticipate the bottom of the shake before "they" take it up.

 

Did you make a total of 400k for the last 24 mos. or is it 400k a year for the past 2 years?

 

I believe this may be a very useful thread.

I respectfully request that my post above be deleted, along with any other worthless posts.

If a good trader like Profit wants to answer trading-related questions without any references to a commercial site, then this belongs in Trading or Journals, not Chit-Chat.

Thank you.

 

TheTraderProfit,

My point is that there is little movement in the spreads, and what little movement there it is very difficult to execute and get fills on. Of course, the opg may be the exception but even this is very difficult on all but the most volatile days. I guess if you just invest and hold til' the deal goes through you can make money, but isn't there better bang for your buck elsewhere? I do appreciate your feedback on this! Thanks.

Mike

 

This thread should be moved out of chit chat. Believe me, this guy knows what he is talking about.

B,

If you would have me, I would come and watch you for a week.

nitro

 

Question - what % of your capital would you allocate to a typical risk arbitrage position?

 

400k over last 24 mos. I have taken a lot of time off. I am up 163k this year.That doesn't include dividends and interest.

I do think that one can trade these arb deals by placing a lot on orders and catching gaps in stock prices, then hedging against the other stock.

In terms of a percentage of capital, I don't really look at it this way. I try to estimate a worst case loss in which my risk is limited to $150,000. I try to stick to low risk deals, and leverage them up. For example, BAC/FBF is trading around 10 cts. I have it on in size as all approvals are in. I'm willing to risk a lot to make a little on a deal with little risk.