Blog Posts

Macro-to-micro analysis involves examining economic conditions and trends on a large scale (macro) and then translating those insights into more detailed, specific contexts (micro). This method is widely used in economic and financial analysis to understand how broad economic forces affect individual sectors, companies, and even specific assets. It often involves having a certain structure […]

Junk bond arbitrage is a strategy in the fixed income market that exploits price discrepancies between high-yield bonds (also known as junk bonds) and other financial instruments. This strategy involves buying undervalued junk bonds and simultaneously hedging the credit risk by shorting equivalent instruments or using derivatives. The goal is to profit from the price […]

A sovereign wealth fund (SWF) is a state-owned investment fund that is composed of financial assets such as stocks, bonds, and real estate. These funds are typically funded by a country’s foreign exchange reserves, which are made up of currency, gold, and other financial assets that a country has acquired through trade or other means. […]

Gamma trading is a options trading strategy that’s used primarily by market makers and professional traders.  It involves managing the gamma of an options portfolio, which is the rate of change of the option’s delta with respect to the underlying asset’s price.   Key Takeaways – Long Gamma Trading Profit from Volatility or Directional Moves […]

Multi-leg options strategies involve using two or more options contracts to create a combined position to achieve specific risk-return profiles. These strategies can be employed to hedge risk, speculate on price movements, or take advantage of market inefficiencies. The primary objective is to manage risk, customize exposures, and perhaps leverage by simultaneously holding various positions […]

In quantitative finance and especially with respect to options pricing, Greek letters are used to relate the sensitivity of the option price to changes in the underlying parameters, such as: price (delta) rate of change of price (gamma) time (theta) volatility (vega), and interest rate (rho) They are often simply referred to as ‘the Greeks’ […]

Post-Earnings Announcement Drift (PEAD) is a well-documented market anomaly where stock prices continue to drift in the direction of an earnings surprise for some time following the announcement. This provides traders with an opportunity to exploit the delayed response of the market to new earnings information. Like all strategies, it isn’t foolproof, and is just […]

Bond spread reversion trading is a strategy used by fixed income traders and portfolio managers to capitalize on the mean-reverting behavior of bond spreads. This trading approach assumes that the spread between yields of different bonds or bond categories will revert to a historical mean over time. Traders exploit this by buying undervalued bonds and […]

Momentum ignition is a sophisticated trading strategy often used in financial markets to exploit short-term price movements. It involves triggering a series of rapid transactions to create a burst of activity that can drive a stock price up or down. The idea is to prompt other market participants to join the movement, such as rules-based […]

Quantitative value trading is a strategy that combines quantitative analysis techniques with traditional value investing principles to identify undervalued stocks and assets and achieve superior returns. This approach leverages mathematical models, statistical methods, and computational power to enhance decision-making and optimize trading performance.   Key Takeaways – Quantitative Value Trading Data-Driven Analysis Quantitative value trading […]