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[amibroker] OT: Time to re-visit leveraging & Market Volatility



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"Through the last half of the 1990's you could not turn your head 
without hearing some financial guru or expert spurting the benefits 
of leveraging. To put it in the simplest terms, leveraging is simply 
using someone else's money to make money."  Quote from the article by 
James Yih:

http://www.moneysense.ca/investing/stocks_markets/article.jsp?
content=209671

James Yih, also says "In the short term market movements are 
random."  I guess, by short-term, he means intra-day, not daily time-
frame, because it is my experience that market movements over a range 
>= 1 day are not random, though they are random intra-day due to 
market volatility and individual securities volatility caused by 
increased liquidity which is the theme of an article by Richard Croft 
who quotes:

"Bottom line: liquidity magnifies intra-day stock price volatility, 
and intra-day stock price volatility is what drives options premiums. 
Those premiums are much higher today than five years ago. If 
deregulation, institutionalization, information and participants do 
not go away, then option premiums that are affected by this, will 
remain high."

http://www.moneysense.ca/investing/stocks_markets/article.jsp?
content=547564

rgds, Pal







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