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Algorithmic Short Selling with Python

You're reading from Algorithmic Short Selling with Python

Product type Book

Published in Sep 2021

Publisher Packt

ISBN-13 9781801815192

Pages 376 pages

Edition 1st Edition

Languages

Concepts

Financial Technology

Author (1):

Laurent Bernut

Table of Contents (17) Chapters

Preface

The Stock Market Game

10 Classic Myths About Short Selling

Take a Walk on the Wild Short Side

Long/Short Methodologies: Absolute and Relative

Regime Definition

The Trading Edge is a Number, and Here is the Formula

Improve Your Trading Edge

Position Sizing: Money is Made in the Money Management Module

Risk is a Number

Refining the Investment Universe

The Long/Short Toolbox

Signals and Execution

Portfolio Management System

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Index

Appendix: Stock Screening

Techniques to improve your trading edge

Next, we will look at techniques to improve your trading edge, which is the main focus of this chapter. We will start by considering how we shorten the left tail, and bring the peak of losses closer to breaking even.

Technique 1: The game of two halves: how to cut losers, ride winners, and maintain conviction while improving your trading edge

There is an unwritten rule in every hospital around the world: surgeons should not operate on their own family. There is no such thing as professional detachment when it comes to your own child. In the investment realm, however, fundamental discretionary market participants struggle with the idea of stop losses.

They are consistently asked to defend their convictions, yet expected to be surgical about their losses. They are forced to lose impartiality, but still required to maintain professional detachment. If they want to master the short selling game, discretionary participants will have...

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Authors (1)

Laurent Bernut

Laurent Bernut has 2 decades of experience in alternative investment space. After the US CPA, he compiled financial statements in Japanese and English for a Tokyo Stock Exchange-listed corporation. After serving as an analyst in two Tokyo-based hedge funds, he joined Fidelity Investments Japan as a dedicated quantitative short-seller. Laurent has built numerous portfolio management systems and developed several quantitative models across various platforms. He currently writes and runs algorithmic strategies and is an undisputed authority on short selling on Quora, where he was nominated top writer for 2017, 2018, and 2019.

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