The small cap Russell jumped 1.6% and the Nasdaq was higher by “just” 0.87%. The action intraday was rife with big fucking red candles that went nowhere. If you were trading you had to be fast, otherwise your gains went POOF.
I have a full portfolio with an $SQQQ hedge at 11% and $TNA long at 5%, which is designed to do two things:
1. Potentially profit from the recent arb in between small and large caps.
2. Reduce potential losses by 50% once the $TNA is removed.
The way the math works out, for you retarded pavement apes who have no brains, each 5% position in $SQQQ is akin to reducing risk or gains in a portfolio with a beta of 1 by approximately 25%. What this means in layman’s terms is that to “get flat” you’d need a 20% position in $SQQQ, anything more than that would present a net bearish position. This is a worthwhile endeavor for those who do not seek to sell their positions but want to protect their accounts.
Most of you bumbling retards likely have portfolio betas of 2, so you’d need a lot more $SQQQ, which has a negative beta of around 3 to 3.5. One thing to consider is the beta is a lagging metric and not real time. Sometimes $CLX can behave like a beta of 2 whilst only being 0.38 overall. To ascertain an intraday score you’d need a high frequency data feed to calculate the covariance and variance; but you can rough sheet it by simply logging the returns of your portfolio crossed against the $SPY, perhaps even on an hourly basis.
I’m definitely talking to myself here with theorems best discussed amongst industry professionals, not amongst the canaille third estate catamites.
Have a good weekend.
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