Even without leverage, the benefits of such a strategy are manifold.
It went like this. If you could provide your brokers with enough turnover at little risk to yourself or better still for some benefit to yourself you got allotted your fair share of Wall Street's Brownie Points.
These took the form of allotments of stock in good deals, likely to trade at a premium when the market opened. Such deals took the form of popular bond issues, secondaries at a heavy discount, IPOs and (this is something I never, ever touched) less holy ground. As long as the deals were well subscribed and had bulge bracket underwriters involved, you were unlikely to come to much harm whatever the market conditions.
It really has given me pause for thought seeing all the good things Quantopian have on offer out there. What an ideal way to feed brokers commission, make a profit of sorts and get a double whammy from allocations in good deals.
