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Fred -
Before I post the next chapter, I'd like to add a couple is
additional notes to this thread on shorting.
Just FYI, there are about 10 Fidelity select funds that can be
shorted. But, most people look at going "short" funds as playing the
Rydex, Profunds, or Potomac short index funds. There is a subtle
difference in these though, from going short. They mirror a multiple
(-1x, -2x) of the daily rate of change of an index. This is
different from an actual short, where you margin percentage (and
therefore your effective leverage) changes over time value of the
fund.
P.S. Fred - you are going to shame me into posting AB versions of
some signals just to avoid being called an "old timer". BTW, I don't
have an AARP card yet!
--- In amibroker@xxxxxxxxxxxxxxx, "Fred" <fctonetti@xxxx> wrote:
> I thought that's what I said, but last I looked these were pretty
> much limited to inverses of an index as opposed to being mirrors of
a
> lot of other stuff.
>
> --- In amibroker@xxxxxxxxxxxxxxx, "areehoi" <hoierman@xxxx> wrote:
> > Fred & All:
> > Rydex and Pro Funds have Short funds that you can play the same
as a
> > short. You can switch between there long and short funds on a
daily
> > basis.
> >
> > Dick H.
> >
> > --- In amibroker@xxxxxxxxxxxxxxx, "Fred" <fctonetti@xxxx> wrote:
> > > You can not short mutual funds, but there are some index
oriented
> > > funds typically based on SPX / NDX / RUT that are built to
track
> > > inversely from the indexes themselves. So the purchase of
these
> > > would equate roughly to the shorting of the index.
> > >
> > > Someone will undoubtedly come along and slap me upside the head
> for
> > > saying this but imho the short side of the market is more
> difficult
> > > to play than the long side. There are several reasons for this
> not
> > > the least of which is that if for no other reason than
inflation
> the
> > > bias of the market is from a very long term perspective, up.
If
> one
> > > were to look at how many up days there were versus how many
down
> days
> > > one would see that over a very long period of time that the
ratio
> is
> > > about 60/40. This is easy to see when looking at long term
> charts as
> > > the character of bull markts is differnet then that of bears,
> where
> > > the former has a tendancy to take a lot longer to move a
similar
> > > distance then the latter when one is looking at environments
that
> are
> > > of equal degree.
> > >
> > >
> > > --- In amibroker@xxxxxxxxxxxxxxx, "jtelang" <jtelang@xxxx>
wrote:
> > > > 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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