Buy yourself some Mechel PJSC, AP Dividend 2019 amounted to 15.68% , Dividend 18.21 roubles per share - page 5
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Actually, the example is a different strategy, but it's also a hedging strategy :)
I only understood the principles of one strategy you wrote about. When you buy a stock and sell a futures contract on that stock, the other one I remember you wrote about, but I don't understand how it works.
I only understood the principles of one strategy that you wrote about. When you buy a stock and sell a futures contract on that stock, the other one I remember you wrote about, but I haven't figured out how it works.
If it was simple everyone would be millionaires.
It takes a long time from implementing the TS to making a profit.
1. Checking the TS takes a huge amount of time.
2. Developing a robot (you cannot trade by hand at all, because you always have to make a trade(s) in response to a hedge)
3. Testing the robot in combat mode.
Very often the TS which seems to work 100% does not work, or works occasionally.
E.g. Artificial Eu
Eu(natural) = ED * Si (Artificial Eu)
But due to the fact that in recent years the spreads have narrowed considerably - this excellent TS does not work (or rather it works, but does not bring profit)
You were given a link to an article, it says it all perfectly about hedging. If you understand forex it's like opening two opposite positions in a forex account without netting with the same volume on the same instrument. Forex traders call it locking or locking.
If it were easy, everyone would be a millionaire.
It takes a long time from implementing the TS to making a profit.
1. Checking the TS takes a huge amount of time
2. Developing a robot (you cannot trade by hand at all, because you always have to make a trade(s) in response to a hedge)
3. Testing the robot in combat mode.
Very often the TS which seems to work 100% does not work, or works occasionally.
E.g. Artificial Eu
Eu(natural) = ED * Si (Artificial Eu)
But due to the fact that in recent years the spreads have narrowed considerably - this excellent TS does not work (or rather it works, but does not bring profit)
It's true, in order to get something one has to put some effort into it first. Although I understand the principle of one of your strategies, I'm still not using it. I should really try it on demo first and make some skill with it or create a trading robot. I prefer to use something that is already there and proven by me.
That's the thing: locking in Forex does not reduce the risk one bit ))
Forex is an example for you to understand the principle, don't get hung up on forex concepts.
...
You have bought a share in e.g. Uber. A futures contract on Uber is in contango. To hedge the risk of a decline in the price of the Uber stock you sell the futures. The instruments are different and the markets are different: shares on the fund are futures on the futures contract. It turns out that when you sell a futures contract, you commit to transfer a specified number of shares to the buyer of the contract. But you don't do it when you sell the futures contract, but when the futures contract expires. Thus, if the price of the stock decreases you earn on the futures, if it increases you earn on the stock. The difference, equal to the refinancing rate of the Central Bank, is your profit.
...
For the sake of simplicity. It's like if you buy a stock and immediately sell it for a slightly higher price, but you don't give it back to the buyer immediately, but after three months, for example.
Forex is an example, so you understand the principle, don't get hung up on Forex concepts.
...
You have bought a stock, e.g. Uber. The Uber futures contract is in contango. To hedge the risk of a decline in the price of the Uber stock you sell the futures. The instruments are different and the markets are different: shares on the fund are futures on the futures contract. It turns out that when you sell a futures contract, you commit to transfer a specified number of shares to the buyer of the contract. But you don't do it when you sell the futures contract, but when the futures contract expires. Thus, if the price of the stock decreases you earn on the futures, if it increases you earn on the stock. The difference, equal to the refinancing rate of the Central Bank, is your profit.
...
For the sake of simplicity. It's the same as if you have bought shares, and immediately sold them at a slightly higher price, but you won't give these shares to the buyer immediately, but for example in three months.
Vitaly, I appreciate your calm explanation. But that's not my point. Notice
1. I did not ask to explain the obvious truths which have long been known to all.
2. I did not argue that the hedging strategy is less risky, and even significantly so.
3) I only asked to quantify it, since one trades by it, one should know more than "ideally the risk should be 0". :)
I'm really interested to hear something concrete from real experience, other than references and quotes from textbooks.
Can you do areal experience comparison of the risks of e.g. this particular strategy and against a portfolio of the same stocks for the same returns?
Vitaly, I appreciate your calm explanation. But that's not my point. Notice
1. I didn't ask you to explain the truths that have long been known to all.
2. I did not argue that the hedging strategy is less risky, and even significantly so.
3) I only asked for a quantitative estimate, since the man is trading by it, he must know more than "ideally there should be 0 risk". :)
I'm really interested to hear something concrete from real experience, other than references and quotes from textbooks.
Can you make a real experience comparison of the risks of e.g. this particular strategy? and compared to a portfolio of the same stocks at the same returns?
What do you mean by quantification?
What do you mean by quantification?
I'm not going to give you references to risk calculations, assuming you know what we're talking about :)
If you say that in general in the strategy the risk is 0 and the profit is the CB rate, then you still need to think whether there are any events that can somehow bring losses, and assess the probability of their occurrence, at least according to historical statistics, and add up the risks.
I'm not going to give you links to risk calculations, assuming you understand what we're talking about :)
If you say that in general the strategy risk 0, and profits - the rate of Central Bank, then you still need to think, are there any events that can somehow bring losses, and assess the likelihood of their occurrence, at least the historical statistics, well, and add up the risks.
:)
Well, you're crazy, and force majeure should also be taken into account :) For example, a cat has treaded on your keyboard, or your hand shook when you sneezed and pressed the wrong key.
You should ask prostotrader, I do not use this strategy in practice.
If we go back to the same forex. Opening the transaction different people at the same time having a deposit of $ 1000, one 1-m lot, and the second lot 0.1. The risk will be different, though the strategy is the same.
:)
You've got to take force majeure into account, too :) For example, a cat stepped on the keyboard, or my hand shook when I sneezed and pressed the wrong key?
You should ask prostotrader, I do not use this strategy in practice.
If we go back to the same forex. Opening transaction different people at the same time having a deposit of $ 1000, one 1-m lot, and the second lot 0.1. The risk will be different, though the strategy is the same.
You are exaggerating about the cat. But I would ask about real risks, which undoubtedly there is, even for example in the deposit over 1.4 the risk of revocation of the license, etc., here too.
And about the profit in the central bank rate. Prostoyrader, aka Prostogruber), the yield is "slightly" higher than the Central Bank rate, is it really there nominal risk=0? Are you sure?