Sunday, February 23, 2014
Google Stall Speed
Stall horn is beginning to sound on the flight of Goog. For those who have climbed into big white fluffy clouds and stalled an aircraft during training there is an extra disorienting feeling added to the fall off of the aircraft before correction. Google may be just heavy enough however to fail to correct itself before falling to levels substantially lower than its current price. Now the forever faithful union of fundamentalist who always tout the earnings, growth, and multiple blah blah on every stock from APPL on, it does not matter, stocks fall regardless of their good news. Just try to convince anyone of the merits of a stock's fundamentals as it is in free fall. Data is the same but the flames dissuades all potential buyers. In fact, Google currently has to same technical overload as AAPL did last year when on its all time highs. APPL came with in 85% or its crash value of 378 in 2013. For Goog to do the same it will break some 476 from its 2014 highs. Crash values provide by QRiskValue.com
Thursday, February 6, 2014
Continued on Trailing Risk
No matter when you traded markets, in the 80's up through today, the greatest marginal advantage made all the difference in being successful. In a pit standing right next to a brokers bid and offer or, for awhile anyway, next to the exchange server's broadcast bid and offer.
The great rush to quant trading operations was ultimately not that they would make so much more money, although I am sure they believed it, but rather that those allocating trading capital would hopefully view quant expertise as the only way to reduce risk exposure in a trading world made flat and edgeless by connectivity.
But the nature of risk is to be misunderstood almost universally. It is true the more time a position remains exposed requires a greater cost in covering the greater possible negative outcomes. HFT seemingly reduced that risk by speeding through all the elements and squashing the measure of time down to almost nothing. Catch me if you can if you will. But the spiraling failure of quick time to capture greater returns shows the greatest marginal advantage in HFT ultimately loses to the performances of the gma in longer time, less transactional strategies. Great returns come from strategies that cover greater event horizon risks because of the increased probability of catching significant returns from extended market moves.
The great rush to quant trading operations was ultimately not that they would make so much more money, although I am sure they believed it, but rather that those allocating trading capital would hopefully view quant expertise as the only way to reduce risk exposure in a trading world made flat and edgeless by connectivity.
But the nature of risk is to be misunderstood almost universally. It is true the more time a position remains exposed requires a greater cost in covering the greater possible negative outcomes. HFT seemingly reduced that risk by speeding through all the elements and squashing the measure of time down to almost nothing. Catch me if you can if you will. But the spiraling failure of quick time to capture greater returns shows the greatest marginal advantage in HFT ultimately loses to the performances of the gma in longer time, less transactional strategies. Great returns come from strategies that cover greater event horizon risks because of the increased probability of catching significant returns from extended market moves.
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