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That's because they're going short on underlying securities,
right, or did you mean something else?.
Can you actually "go short" on a MF itself, or is that a
no-no?
--- In amibroker@xxxxxxxxxxxxxxx, "Chuck Rademacher"
<chuck_rademacher@x> wrote:
> Jitu,
>
> You may not be aware, but there are some mutual funds (Rydex,
ProFunds) that
> when you "buy" them, you are effectively taking on a "short"
position.
> -----Original Message-----
> From: jtelang [mailto:jtelang@x...]
> Sent: Friday, November 14, 2003 10:11 PM
> To: amibroker@xxxxxxxxxxxxxxx
> Subject: [amibroker] Re: Trading mutual funds...
>
>
> Fred,
>
> From this, do I understand it correctly that one can't go
> short on MF's? Why would one be sitting on cash otherwise?
> Or may be I'm not following what you said below...
>
> Jitu
>
> --- In amibroker@xxxxxxxxxxxxxxx, "Fred" <fctonetti@xxxx> wrote:
> > One other note regarding short term trading ... There are of
course
> > ways to accomplish the same thing with out actually taking the
> short
> > term trades i.e. by hedging using a bear oriented fund leaving
you
> > more or less market neutral during the period of time when you
> would
> > have been sitting in cash.
> >
> > --- In amibroker@xxxxxxxxxxxxxxx, "Fred" <fctonetti@xxxx> wrote:
> > > See below ...
> > >
> > > --- In amibroker@xxxxxxxxxxxxxxx, "Chuck Rademacher"
> > > <chuck_rademacher@x> wrote:
> > > > Maybe some of you guys (and gals) who trade mutual funds can
> > answer
> > > a couple
> > > > of questions?
> > > >
> > > > 1. If there's no money to be made in (rotational trading
of)
> > > ETF's, am I
> > > > correct when I assume that there's no money to be made in
the
> > Rydex-
> > > like
> > > > funds that only mimic an index?
> > > >
> > >
> > > Rydex's funds are pretty much either index or sector oriented.
> > This
> > > is not the kind of thing I personally like to trade. But for
> > example
> > > if you have a system that trades SPX, NDX or RUT well or is
good
> at
> > > jumping on the sector that's likely to be hot next as opposed
to
> > the
> > > one that just was then it would certainly work in this
scenario.
> > >
> > > > 2. Based on current rules and redemption penalties, which
> > families
> > > of
> > > > mutual funds can you recommend for rotational trading?
> > > >
> > >
> > > I don't personally trade on what one would consider to be a
> > > rotational basis. As I and Ken stated, erf's or the funds
> > management
> > > policies will eventually weed out most if not all the short
term
> > > traders, especially the ones with large dollars. So if you
are
> > > looking to trade mf's with some sort of short term oriented
> > > rotational system as opposed to one that trades on an
> intermediate
> > > basis picking good candidates at the beginning of a market buy
> and
> > > for the most part holding them until a market sell then you
are
> > going
> > > to find yourself pretty much limited to Rydex, ProFunds &
Potomac.
> > >
> > > > 3. If most (or all) such families of funds charge early
> > redemption
> > > fees, is
> > > > it safe to assume that you are trading these mid to long
term?
> > > >
> > > > There's no sense in me working on a system that appears to
do
> > well,
> > > only to
> > > > find that redemption fees are going to kill me. Or, is it
> > > possible that
> > > > there's enough money to be made that the fees are of little
> > > consequence?
> > > >
> > >
> > > Most do NOT yet charge erf's and as you can see from prior
posts
> > it's
> > > debatable as to whether or not they will and if so what the
> minimum
> > > holding periods will be to trigger those. For short term
> oriented
> > > traders adding a 1-2% erf in a 7-14 day period would be
enough to
> > > send them elsewhere or to a different methodology. What the
SEC
> or
> > > the fund companies themselves will do with this remains to be
> > seen.
> > > They really can't afford to be too outrageous with it as every
> > > 401k/IRA/VA account holder on the planet will be screaming
bloody
> > > murder.
> > >
> > > > Out of all of the above, I'm really interested in some
> > > recommendations on
> > > > mutual fund families to trade. I can then go do my own
> > > investigation as to
> > > > their fees, etc and devise my own systems that will work
with
> > those
> > > fees.
> > > >
> > >
> > > I wouldn't think families as there is no real reason to just
like
> > > there is no real reason to arbitrarilly limit ones trading in
> > stocks
> > > to some specific group based on whatever.
> > >
> > > > Thanks
>
>
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