mma said:
I can't even be bothered to pull you up on most of the cr*p you spout, but at least find out what arbitrage is and why LTCM went bust before making stupid statements.
Arbitrage is <b>defined</b> as something giving risk free profit, if it doesn't give a risk free profit it isn't arbitrage!!! It definitely does exist and it is not the only source of "market inefficiencies" (some of which I agree aren't risk free and so aren't arbitrage). About the only risk you could conceivably sau there is with arbitrage is execution risk which I'm pretty certain isn't what you're talking about, and just means you didn't do it properly rather than that arbitrage itself is risky.
LTCM didn't go bust because of arbitraging they went bust because they thought they were the biggest swinging dicks around and they over-extended themselves on the positions they had.
wysi
wysinawyg
i have tried explaining this to mma before - but mma has an incredible inability to understand financial companies and how they all operate and that they are all different
ltcm was a hedge fund with a floored hedging strategy since they over extended their capital requirements due to using too high leverage and got margin called
arbitrage is what keeps all markets in tune and represents an incredibly high percentage of trading volume day in day out
i have tried explaining this to mma before - but mma has an incredible inability to understand financial companies and how they all operate and that they are all different
ltcm was a hedge fund with a floored hedging strategy since they over extended their capital requirements due to using too high leverage and got margin called
arbitrage is what keeps all markets in tune and represents an incredibly high percentage of trading volume day in day out
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hey wysi ,
where you been kid.
forget definitions - for academics only . Have you arbed before ?You try arb trading only for a couple of years and I bet you , you won't say it is risk FREE anymore .
Only thing free in the world is death and taxes ( if it can be called free )
Arbing RISKS are plenty , including execution an liquidity , which can both be HUGE .
Say you have filled one side of a arb trade but couldn't the right price on the other . Now you are taking less profit or you are losing money all together. that's coz nothing is guarnteed not even arb trades since prices on both sides will not stay the same waiting for you to click that return button.
Or you have taken the offer on 1 side and as you thought you were clicking sell button at same time - you only get a a partial fill
( somebody beat you to the other half ) on the bid side - you are still long the balance of your trade .
The market the tanks 60 points and what is that now ? why goodness me you're holding a loss .
SO MUCH for risk free arb trading , nothing is free in life , otherwise we would all be arb traders and there would be no hedges or managed futures or ANY independent traders.
Oh and LTCM did arb trading . They went bust coz they were not GOOD ENOUGH . full stop - so what .
you 2 are not saying that you can do better than a couple of PHD profs are you ?? coz you'll be taking it if you are.
I think we all would like to know exactly what kind of * financial company * stevet works for , since he poses as an * expert trader *.
where you been kid.
forget definitions - for academics only . Have you arbed before ?You try arb trading only for a couple of years and I bet you , you won't say it is risk FREE anymore .
Only thing free in the world is death and taxes ( if it can be called free )
Arbing RISKS are plenty , including execution an liquidity , which can both be HUGE .
Say you have filled one side of a arb trade but couldn't the right price on the other . Now you are taking less profit or you are losing money all together. that's coz nothing is guarnteed not even arb trades since prices on both sides will not stay the same waiting for you to click that return button.
Or you have taken the offer on 1 side and as you thought you were clicking sell button at same time - you only get a a partial fill
( somebody beat you to the other half ) on the bid side - you are still long the balance of your trade .
The market the tanks 60 points and what is that now ? why goodness me you're holding a loss .
SO MUCH for risk free arb trading , nothing is free in life , otherwise we would all be arb traders and there would be no hedges or managed futures or ANY independent traders.
Oh and LTCM did arb trading . They went bust coz they were not GOOD ENOUGH . full stop - so what .
you 2 are not saying that you can do better than a couple of PHD profs are you ?? coz you'll be taking it if you are.
I think we all would like to know exactly what kind of * financial company * stevet works for , since he poses as an * expert trader *.
neil
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MMA And His Incredibly Noisy Anus
WYSINAWYG Said:
"I can't even be bothered to pull you up on most of the cr*p you spout, but at least find out what arbitrage is and why LTCM went bust before making stupid statements."
WYSINAWYG,
Put he who speaks through his Anus, on "Ignore."
You will find the threads still read ok.
:cheesy:
WYSINAWYG Said:
"I can't even be bothered to pull you up on most of the cr*p you spout, but at least find out what arbitrage is and why LTCM went bust before making stupid statements."
WYSINAWYG,
Put he who speaks through his Anus, on "Ignore."
You will find the threads still read ok.
:cheesy:
But I'd miss out on fun challenges like this:
<i><b>Oh and LTCM did arb trading . They went bust coz they were not GOOD ENOUGH . full stop - so what .
you 2 are not saying that you can do better than a couple of PHD profs are you ?? </i></b>
But before I take it up I need to get straight, MMA you're really asking me to try and achieve a better than -100% result from trading? It could be tricky but I think I might just be able to do it... You up to the task Steve?
wysi
<i><b>Oh and LTCM did arb trading . They went bust coz they were not GOOD ENOUGH . full stop - so what .
you 2 are not saying that you can do better than a couple of PHD profs are you ?? </i></b>
But before I take it up I need to get straight, MMA you're really asking me to try and achieve a better than -100% result from trading? It could be tricky but I think I might just be able to do it... You up to the task Steve?
wysi
neil
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- 752
wysinawyg said:But I'd miss out on fun challenges like this:
<i><b>Oh and LTCM did arb trading . They went bust coz they were not GOOD ENOUGH . full stop - so what .
you 2 are not saying that you can do better than a couple of PHD profs are you ?? </i></b>
But before I take it up I need to get straight, MMA you're really asking me to try and achieve a better than -100% result from trading? It could be tricky but I think I might just be able to do it... You up to the task Steve?
wysi
Good luck: But he ( MMA ) must be a plant - nobody can be that dysfunctional ?
:cheesy: :cheesy:
mma
arbing is about having a methodology that works - but someone who loses is not arbing - they are losers
arbing off low liquidity will burn you - arbing with high exection costs will burn you - arbing without high speed market access will burn you - arbing without knowledge of markets will burn you
hence you are right in your understanding of it - You would lose money doing it
arbing is about having a methodology that works - but someone who loses is not arbing - they are losers
arbing off low liquidity will burn you - arbing with high exection costs will burn you - arbing without high speed market access will burn you - arbing without knowledge of markets will burn you
hence you are right in your understanding of it - You would lose money doing it
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mma
and to get back to LTCM
they took outright postion plays in all global markets and felt the extent of their positions would mean they were totaly hedged no matter what - what that had not figured in was the scenario of all global markets tanking in one go - so their HEDGE strategy was floored - had they been arbing they would have been fine, but in arbing you just make lots of tiny profits - albeit they add up over time - so a different type of trade
LTCM were just long term traders who felt their strategy gave them protection - it didnt
they also made the fundamental mistake of thinking risk reward is based on decisions you decide on for entry and exiting a trade - its NOT - risk reward is the calulation you make over time as to your draw down verses your profit - that is your real risk reward basis - not what you have decided it should be to suit your trading method
and to get back to LTCM
they took outright postion plays in all global markets and felt the extent of their positions would mean they were totaly hedged no matter what - what that had not figured in was the scenario of all global markets tanking in one go - so their HEDGE strategy was floored - had they been arbing they would have been fine, but in arbing you just make lots of tiny profits - albeit they add up over time - so a different type of trade
LTCM were just long term traders who felt their strategy gave them protection - it didnt
they also made the fundamental mistake of thinking risk reward is based on decisions you decide on for entry and exiting a trade - its NOT - risk reward is the calulation you make over time as to your draw down verses your profit - that is your real risk reward basis - not what you have decided it should be to suit your trading method
* But before I take it up I need to get straight, MMA you're really asking me to try and achieve a better than -100% result from trading? *
the likes of you won't even get within 10 miles of being in a position to do - 100% , so you've lost even before you start.
Cut and paste = No such thing as risk free anything , as said even arbitrage has big risks . Don't argue circular on this anymore please - waste of time . You can say you believe arbing is absolutely risk BUT few will believe you .
And please don't rant on about what you think happened to LTCM , news agencies have done that many times over and they reported them as arb players .
GIVE US ONE REASON WHY WE SHULD BELIEVE YOU OVER THEM ?
I think we all would like to know exactly what kind of * financial company * stevet works for , since he poses as an * expert trader *.
I'm waiting for your answer.
the likes of you won't even get within 10 miles of being in a position to do - 100% , so you've lost even before you start.
Cut and paste = No such thing as risk free anything , as said even arbitrage has big risks . Don't argue circular on this anymore please - waste of time . You can say you believe arbing is absolutely risk BUT few will believe you .
And please don't rant on about what you think happened to LTCM , news agencies have done that many times over and they reported them as arb players .
GIVE US ONE REASON WHY WE SHULD BELIEVE YOU OVER THEM ?
I think we all would like to know exactly what kind of * financial company * stevet works for , since he poses as an * expert trader *.
I'm waiting for your answer.
mma
i told you before - i trade for a prop company
and i dont want you to believe me - i could give a shit what you believe - i am just relating the facts as i believe them to be - in the same way that you relate facts as as you believe them to be
i told you before - i trade for a prop company
and i dont want you to believe me - i could give a shit what you believe - i am just relating the facts as i believe them to be - in the same way that you relate facts as as you believe them to be
Exactly, its all relative...
I do apporximately 25% of my firm's trades but make about 30% of the dough, and i am satisfied with this. However, if i were doing this much trading and making a much smaller proportion of the money i would feel that there is a problem.
This is how a gauge my effectiveness if u like...
stevet said:
I do apporximately 25% of my firm's trades but make about 30% of the dough, and i am satisfied with this. However, if i were doing this much trading and making a much smaller proportion of the money i would feel that there is a problem.
This is how a gauge my effectiveness if u like...
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