riskarb's trading journal

At times when you are in a DD, you get some of your strongest signals and some require heavier size and even after adjusting for reduced equity the position still seems bigger than usual...and then it's easy to think,it's a bet the ranch trade to recover the DD , but it's not..... It's hard to explain this to others and it is frustrating too.

 

Agree 100%.

The smaller trades [<250k] are usually based upon a principle of trading the distro as often as possible. There isn't any bet-variation attributed to those... it's table minimum, so to speak.

Anything $500k or larger is usually based upon system signals or a a compelling discretionary-trade. This one is a combination of both. So far, so good; +8 handles from signal.

Anything =/> 30d is always a mil or larger. The risk is VaR; in this case, $1mil at the barrier and +expectancy at >2sigmas up.

 

I think the best investors are true traders. The worst are Wall streeters on the sales side who think they understand the markets but don't. These folks are atcually worse than mom & pop on the street who know they don't know. Actually mom & pop aren't bad. If you fully disclose the risks to them, and communciate with them regularly they can be long term sticky money. Even stickier thna the so called "sophisticated investors"

Wish you well, pal! Be well.

 

Thanks CP

 

I am retooling my index exotic hedging, which will involve moving the ES hedge account from IB to a futures clearer with a 106-lease. I imagine I'll be using X_Trader, as Ecco seems to be a bit slower. Any suggestions for clearing firms are appreciated.

 

Pax, RJ O'Brien or Penson are the three I hear a lot about.. assuming I listen

 

wow , this is an unbelievable odds...Betonmarket asking 3.4mil to win 4m for 1175 x 25d this morning ( 10 point higher SPX and 700bp drop in vols after your original bet !). You probably making 500k now. Way to go , B !

 

Thanks A; cash is implied at 1300+ higher than when I traded it, and the duration is a few days longer than the arbitrary BOM dates. I have the 1175 no touch worth $2.9mil based upon the rally and vol-drop.

 

Sold another 50 Sep ES at 124650avg. -- short 550 from an average of 123400 net of comms.

 

Will you consider an early exit at some point ? You probably already got the largest dVega gains at this point, right ?