Trading Ideas/Potential Trades

In the simplest of terms, hedging a portfolio using index futures is much easier than building an entire line of several stocks.


The line may take several days, the hedge may take several hours at the most. Pretty simple stuff.

Why come here? I try to tap into several diff't streams of information to get a rythm of different groups of market operators. From what I hear, this is one of the best places to come if you're looking for hyper-active daytraders.

I think the coming year is going to be rather difficult for this type of trader, and more of an environment for position traders, so I would like to see how the traders here are going to handle it, see if any will convert to position trading, and maybe even find a trader or two to bring on board....

My questions are designed to arouse dialogue. But unfortunately, many in here like to doubt each other and argue about who's better than to actually present valuable market perspectives.

 

I might add the following.....

Those that can be somewhat successful at trading Nasdaq stocks consistently, have a good chance of becoming good currency traders. And that's where the real $$'s at.

 

Pejman, Im really interested in currency trading, any advice how to begin learning the stuff, ex. websites etc? Mind you, Im not really in position to order some books from Amazon or somewhere...

Also, how does that thing work, do you have contracts similar like Nas or SP or something?

THX
Alex

 

"In the simplest of terms, hedging a portfolio using index futures is much easier than building an entire line of several stocks. "

Geez, I got it right. Now, where do I apply to become a hedge fund manager

 

So your theory of your hedge fund scenerio...........you said you where about to start workiing for one........means your not working for one now & are not doing this hedging game realtime at present correct or no ?

Have you ever worked with a hedge fund where you had to use these stratagies, if so what size positions where you putting on of what kinds of stocks & index futures for example.........

For example in your scenero..........do you work a position based on getting the best price ? Or because the size you put on is to large for the liqidity of the stock ? & if the latter is true what size position are you speaking of doing on what type or what names of stocks ?.....

if you have NOT yet ever did this kind of stratagies because you never had a fund or larger acct to work on, how did you arrive that rather than exiting your trade that was wrong become a hedging game with index futures ? why not just exit your position & re establish at better prices or look for a new setup to trade ?


What kind of size per posiiton are you talking about & how many positions at one time & this is based upon what size of a acct you will be working to do this stratagies ?

I am interested in learning more of what you do but you need to clarify this more for us

Chris

 

I think hedging strategies are much trickier than they look in theory. It takes great skill and timing to hedge a large portfolio. You have to be able to correlate your portfolio to the hedge instrument to come up with a hedge ratio. Then you have toknow when to lift the hedge. If it was easy, you could just trade the hedge vehicle, ie the futures, make money on them and forget the equity. But you can insulate yourself from the big loss. That's why they call it a "hedge fund", the manager is supposed to prevent a big loss like many mutual funds incurred the last two years. What is often overlooked is that the hedging has a cost and that cost can severely impact upside performance.

Many so-called macro funds, think George Soros, made huge profits on currency moves. Pej is correct in saying that FX is the best trading market for this type of trading, as liquidity is huge and good trend runs occur.

I look forward to seeing Pej outline his strategies and plays.

 

I am talking about positions in the range of 350,000 to 750,000 shares in stocks such as CSCO, GE, IBM, INTC, JPM, JNJ, MSFT, and pretty much the top 20 liquid stocks in the NDX and top 10 liquid stocks in the INDU. Approx 10-12 positions on at a time per campaign, but this varies.

I have been trading this size for quite a while now.

Unfortunately, if you want to learn the details of the strategies employed and the actual plays, you will need to submit to me your C.V., if you have one, and if you're a candidate, we can talk about it privately then.

Send CV to pejmanh@hotmail.com

Thanks,

PH

 

I forgot to add, the size I laid out is not considered to be of a "large hedge fund" by any stretch of the imagination. In fact, this is a pretty small size relatively.

 

To effectively "trade" this type of size, you need a minimum of 3-5 assistant traders on your desk. They will be responsible for particular position placement, management and risk control once they are given the trade parameters. You do NOT do this alone. The head trader rarely manages in and out of a position. Rather, they monitor the more complex aspects of the overall portfolio.

Chartwiz, I suggest you let your guards down some. You can teach us common folk a thing or two much more effectively that way, and I sure am anxious to see some interesting dialogue from you.