We believe these different objectives mean that greater - than - zero - sum opportunities can in fact be available, i.e., we can have transactions that further the objectives of the
participants on both sides of a trade.
We could easily find ourselves in an uncharted situation of multiple rounds of tit - for - tat tariffs that wind up meaningfully reducing living standards in the
nations on both sides of the trade war.
Here's what mostly happens: Large banks and brokerages trading with their own money (we call it proprietary or «prop» trading) will have a number of limit (and other, more exotic) orders
sitting on both sides of the trading book waiting to buy or sell at a price that they feel is advantageous.
There, a group of seven or so people — always including Messrs. Tropin and Pertusi — discusses all aspects of risk: market risks, risks in individual traders» portfolios and how they have changed since the day before, risks to the way the firm is investing its cash, counterparty risk — or risk that the
firm on another side of a trade will fail, even evaluations of whether traders» are in positions that are «crowded» with other hedge funds.
I would estimate I lose several percentage points of
gain on both sides of the trade, but the potential for extraordinary returns on these illiquid stocks is worth the time and effort.
Legal - fee auditor John Toothman, who heads The Devil's Advocate in Alexandria, Va., says he once reviewed bills in a case where
lawyers on both sides of a trade - secret dispute each ran up about $ 500,000 in fees in just two months.
We believe these different objectives mean that greater - than - zero - sum opportunities can in fact be available, i.e., we can have transactions that further the objectives of the
participants on both sides of a trade.
Aggressive investors are
on both sides of this trade.
Hedge funds are buy the implied volatility
on the side of the trade where it is cheap and sell the implied volatility on the side of the trade where it is expensive.