Thursday, July 26, 2018

Quantitative Methods : The Hybrid Scenario

I think Fundamental investing and quantitative methods will co-exists and will remains as-is in far future. Quantitative ways may have some additional substance because it uses sophesticated computer/algorithms which are followed by faster decisions (either by system or human). I am trying to add one more dimension to quantitative theory which is "Quality" and hence I started my thoughts with fundamentals.
Now, is there any way where we can classify option strategy legs against the "Quality". Just to be clear, here I am not talking about trade probability of success as a quality parameter. I am trying to qualify the quant decisions. May be a different kind of thought but I think its worth pondering.

As always, I am trying to be very short and these are just my thoughts!

Wednesday, July 11, 2018

Meaning of "Hedge".....Its actually Simple

When you try internet search for various option strategies , the mostly or commonly used word is "Hedge" which has been portrayed as kind of 'Magic' which may not be true. I would say its a very overloaded term in trading universe.

To me hedge positions are just a delay for making the loss from Primary position. I usually tries to divide my trade in categories 1) Primary Trades and 2) Balancing Positions. The idea is very clear that you can not earn profit from second one in any situation.

I like the term "Balance" than 'Hedge' as I think asymmetrical balanced positions are always have higher probablity alpha than technically hedge positions. If you take positions near to primary then we can say it as more balanced than far positions to primary BUT, alpha probability is inversely proportional to this balanced options hence we need to carefully do balancing act and thats the KEY.

As always, I am trying to be very short and just my thoughts!

Tuesday, July 10, 2018

Automobile 'Driver' to "Operator"? Change to think!


Now a days, we are reading very much about automated features in cars or I would say an automobile but here I am more interested in self-driving cars - Word itself sounds amazing, right?

But to me, I think here we are changing the basic definitions of "Driver" to just an "Operator". With this change, we need to think about various parameters but most importantly "Control". Now we will be just a observer and computer programs or algorithms does the rest. Such technologies are well established in aerospace as 'fly-by-wire" but in automobile these are semi automatic implementations with humans in loop.

This looks very soon as the general phenomenon as algorithms are maturing to the safety level. 

Just my quick thoughts!


Quantitative Methods : The Hybrid Scenario

I think Fundamental investing and quantitative methods will co-exists and will remains as-is in far future. Quantitative ways may have some...