Blog Posts

If hedge funds have one real strength, it isn’t picking the hottest stock or calling the next major macro shift. It’s how they manage risk. Many beginning traders imagine hedge funds as bold gunslingers. They think of concentrated bets, calling the next big thing, exotic derivatives, or extreme leverage. And yes, some of that happens […]

Day trading sounds exciting. You sit at a computer and click buttons and make money. It’s very different from a 9-to-5 and even traditional entrepreneurship where you openly sell a product or service. (Trading primarily provides value through capital allocation and liquidity provision in financial markets.) Yet, as we listed here, 96% of day traders […]

From the outside, and among novice traders, there’s the widespread belief that trading is about predicting the future and being right.  Call the top, buy the bottom, predict what happens next.  Unfortunately, that mindset is why most traders have suboptimal results. It rarely works out. Taking into account the edge institutional traders have, plus the […]

Let’s say you’re trading a market and you want the upside, but want to limit the downside, but don’t want to pay an arm and a leg to protect against it. What do you do? In this article, we provide one idea.   Key Takeaways – Using Ratio Spreads to Finance Protection Goal: keep most […]

In trading, productivity is essential. Traders need to make quick decisions, analyze vast amounts of data, and stay ahead of changing market trends.  You have only so much time and so much energy. Boosting productivity can lead to better decision-making, higher profits, and a more balanced lifestyle.   Key Takeaways – Productivity & Time Management […]

Exotic financial trading strategies go beyond traditional asset classes like stocks, bonds, and plain vanilla options. They often feature complex structures, unusual payoffs, and multiple market dimensions. We’ll discuss what “exotic” strategies are and examples of them.   Key Takeaways – Exotic Strategies “Exotic” strategies use complex, customized payoffs that depend on barriers, paths, or […]

Market impact is a concept in financial markets, referring to the effect a market participant has when buying or selling an asset. It is an essential consideration for large investors, such as financial institutions, as it can significantly influence investment decisions and overall profitability. This article will explore the nuances of market impact, its relationship […]

Are machines a substitute for human intuition in markets? The answer is layered. Machines – by which we mean quant models, algorithms, and AI – absolutely excel at certain aspects of markets, but they also stumble where human intuition remains hard to code.   Key Takeaways – Can Machines Really Beat Human Intuition in Markets? […]

After over 60,000 hours in the markets, this is what I’ve learned. These reflections are just my own perspective. There are many viable ways of doing things. They’re not definitive answers, but observations you may find useful as you develop/refine your own approach. Take what resonates, question what doesn’t, and remember that the ultimate test […]

Valuation is one of the most popular lenses through which to view the stock market. Whenever it becomes expensive you see headlines like this: Valuation metrics like the price-to-earnings (P/E) ratio are nonetheless limited when it comes to market timing.  Valuations demonstrate strong correlations with long-term returns, but they offer virtually no insight into short-term […]