Any ideas what trading strategy he could be employing?
“All it does is look at the last trade and calculate trades that would be equivalent of, ‘What if this security increases 50 percent in value in the next three seconds,”’ Meyer says of his program."
Saw the piece on Bloomberg today...keeping with Simon's theme, maybe a big ole diversified portfolio of deep out of $ options?
What is really confusing is the 10 year investment term, with a punishment of 1/2 of investment for early redemption. Yet the article states that the majority of the funds are in treasuries. So why would a fund that is so liquid need to impose such harsh redemption requirements?
If the majority of the funds are in treasuries, those are collateral for derivatives trades, either options or futures or swaps or something. Not able to sell them.
Yep good point, but wouldn't that mean that the projected time to unwind the derivatives positions (without negative impact to the market being traded) is 10 years, and the cost of the early unwind (or premiums paid before getting in the money) is 50% of portfolio? I guess it depends on how much leverage is being used and what markets are being traded.
This is most certainly fraud. The reason for the 10 year limit with such a large penalty is to make sure the rate of withdrawal stays below the rate of acquisition keeping his ponzi scheme afloat. In 9 years he will buy himself a one way ticket to Mexico.
The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by Quantopian.
In addition, the material offers no opinion with respect to the suitability of any security or specific investment. No information contained herein should be regarded as a suggestion to engage in or refrain from any investment-related course of action as none of Quantopian nor any of its affiliates is undertaking to provide investment advice, act as an adviser to any plan or entity subject to the Employee Retirement Income Security Act of 1974, as amended, individual retirement account or individual retirement annuity, or give advice in a fiduciary capacity with respect to the materials presented herein. If you are an individual retirement or other investor, contact your financial advisor or other fiduciary unrelated to Quantopian about whether any given investment idea, strategy, product or service described herein may be appropriate for your circumstances. All investments involve risk, including loss of principal. Quantopian makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances.
