Blog Posts

Time Decay Arbitrage is a trading strategy that takes advantage of the time decay characteristic inherent in options pricing. This strategy focuses on exploiting the difference in the rate of time decay (theta) between different options.   Key Takeaways – Time Decay Arbitrage Deterioration of Option Value Time decay accelerates as expiration approaches. Toward expiry, […]

High-probability trading strategies are designed to generate consistent, albeit often smaller, profits over a large number of trades. These strategies typically involve frequent trading with a high success rate, but the trade-off is that when losses occur, they can be substantial. The key to success with these strategies lies in risk management, position sizing, and […]

Hydro power arbitrage is a financial strategy involving the use of hydroelectric power plants to take advantage of price differentials in electricity markets. This method leverages the flexibility and storage capabilities of hydroelectric plants to optimize revenue generation. Hydro power arbitrage is clearly industry-specific but we also cover what traders can learn from the practice. […]

Macro quantitative strategies involve the use of quantitative models to make trading decisions based on the analysis of economic trends and macroeconomic indicators. These strategies are typically used by hedge funds, sophisticated traders, and other investment firms to generate returns by predicting movements in financial markets influenced by global economic conditions.   Key Takeaways – […]

Electricity trading is the buying and selling of electricity on various markets, which enables the efficient distribution and consumption of power. This process involves multiple stakeholders, regulations, and market mechanisms designed to provide a stable and efficient electricity supply.   Key Takeaways – Electricity Trading Understand that electricity trading involves fluctuating prices influenced by supply, […]

Yield curve control (YCC) is a monetary policy tool used by central banks to target specific yields on government bonds to influence overall economic conditions. Traders can leverage YCC strategies to optimize their portfolios and trading strategies.   Key Takeaways – Yield Curve Control Trading Strategies Capitalize on central bank interventions by buying bonds at […]

Tax arbitrage strategies involve exploiting differences in tax regimes, rates, and regulations across different jurisdictions or within different segments of the same tax system to minimize overall tax liabilities. These strategies can be complex and are often employed by corporations, investment funds, traders, and high-net-worth individuals. While tax strategies are much less talked about than […]

Liquidity provision strategies are critical for the smooth operation of financial markets. They involve various techniques and approaches to facilitate trading, reduce transaction costs, and improve market stability.   Key Takeaways – Liquidity Provision Strategies Market making HFT Arbitrage Algorithmic trading (various strategies) Dark pools Liquidity mining Central bank liquidity provisioning   Market Making Market […]

Bayesian optimization is a probabilistic model-based approach for optimizing objective functions that are expensive to evaluate. This technique is handy in trading strategies where backtesting and parameter tuning can be computationally intensive. This strategy is useful for more technically-oriented traders of all stripes – from scalpers and day traders through longer-term position traders.   Key […]

Dual Momentum Trading is a trading strategy developed by Gary Antonacci that combines two types of momentum: relative momentum and absolute momentum This strategy tries to capture the benefits of both types of momentum to improve returns and reduce risk.   Key Takeaways – Dual Momentum Trading Dual Momentum Trading combines relative strength momentum and […]