Trading very big money

Discussion in 'Options' started by marsman, Jul 19, 2016.

  1. yes
    thats it
     
    #31     Jul 20, 2016
  2. cvds16

    cvds16

    that didn't quite work so well after 2008
     
    #32     Jul 20, 2016
  3. Alternatively, you can bet on the OTC markets with any structured products/ options contracts custom made for you!

     
    #33     Jul 20, 2016
  4. Just so you know:

    https://en.wikipedia.org/wiki/Volcker_Rule

    Banks can't 'prop trade' any more. I haven't researched it but I don't think prop trading was ever a major source of income... in fact it was something of a Trojan horse that made the bank too vulnerable to extraordinary events. It's at conflict with the major functions of the bank. Prop trading mainly benefited the prop traders... who are now at hedge funds bankrupting them.
     
    #34     Jul 20, 2016
    Sig likes this.
  5. newwurldmn

    newwurldmn

    Most prop desks had a record year in 2008. In fact most trading desks did. Unfortunately it was offset by the mortgage desks. Of course, banks can't stop trading mortgages so the regulators went after prop trading. Why did the banks not fight it? It was a small price to pay. Proper prop trading has a very high ROE and ROC for the banks - but it's a small part of their pnl. It was a sacrificial lamb. Give up a 200MM business to keep a 2Bn business intact.

    RE: the customer facilitation. There is a lot of prop that goes on - but it's not the primary source of income. The primary source of income is receiving commissions or spread and then protecting as much of that spread as possible. The prop is in conjunction with that - a customer sells a lot of delta to you and you are bullish. You might not sell all of the position out.
     
    #35     Jul 20, 2016
    Rationalize likes this.
  6. As I said....investment banks make most of their money from banking services...not directional trading...

    upload_2016-7-20_14-18-47.png
     
    #36     Jul 20, 2016
    Sig likes this.
  7. dealmaker

    dealmaker

    Big money doesn't trade momentum they trade business cycles and they are spread across all asset classes eg when Joe & Jane Ordinary were dumping their real-estate assets 2008-09 billionaires were buying marquee assets and waiting for the next up cycle. One of the privileges of extreme wealth ( unless you were extremely levered like Aubrey Mcclendon was which is an exception) is the ability act when you want. Their emphasis is preservation of assets, growth is a by product of diligence, good and timely advice.
     
    #37     Jul 20, 2016
  8. Let's say you run $5 billion. Until recently, it's become increasingly harder to fill adequate size even in the most liquid markets, e.g., EUR/USD giving 10-15pip spreads. Recently (past 12-18 months) that has come back down. Ultra liquid futures are also possible, e.g., CL. Large market cap equities. Can flip this book within 3-5 days comfortably.
     
    #38     Jul 20, 2016
  9. USDJPY

    USDJPY

    Buying a portfolio of stocks, hedging with stock index futures, and speculating on currency moves in the fx market. It's all in George Soros's first book.
     
    #39     Jul 23, 2016
  10. USDJPY

    USDJPY

    George Soros, Stan Druckenmiller, David Tepper and John Arnold would beg to differ. They did quite well from trading.
     
    #40     Jul 23, 2016