SOME LESSONS WE LEARNED - PART 2 - Emergent Quant
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SOME LESSONS WE LEARNED – PART 2

SOME LESSONS WE LEARNED – PART 2

Some lessons we learned – Part 2:

  1. When in doubt about buying or selling options, sell them (covered, of course).
    • If you decide to buy them anyway, do not buy long term otm options where the underlying has a negative carry, because carry would weight too much.
  2. It’s generally preferable to focus on short term, simply because on the medium to long term there are too many factors that could influence an asset price that you could not even imagine at the moment.
  3. Bias related to open positions or to a personal belief not sustained by facts should be avoided.
    • Breakdown pros and cons of a position and try to ponder them in a view that considers each one of them.
    • If you have an idea, look for opposite views. E.g. if you are sold on a long equity position, read zerohedge.com
  4. Try to identify a general mood and do not go against that mood in intraday operations.
  5. Write down the reasoning behind a trade before opening a position and then review it when you close it.
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