"Ice-cream Speculation"
Two ice-cream vendors approaches your house
One sell chocolate for $5 the other caramel for $2
The trader inside you scream like a maniac: how could you charge so much for a chocolate cone while your competitor priced much lower?!
"Outright"
Scenario A
“Let me tell you how to run a fair price business ---I bet your price will go down, I'm shorting 10 contract of you vicious chocolate man!”
Scenario B
“Let me tell you how to run a profitable operation ---I bet your price will go up, I'm longing 25 contract of you my venerable caramel buddy!”
"Spreading"
“Let me tell you how to run a fair price business ---I bet your unjustifiable price will go down, I'm shorting 10 contract of you, vicious chocolate man! In the mean time I'm longing 10 contract of your competitor!"
"Market Neutral"
"I'm shorting 10 contract of you while longing 25 contract of your caramel competitor!"
"Outright Goes South"
Scenario A
"Wait wait wait, your chocolate cone's price keep rising and there are more suckas willing to pay for that???"
Scenario B
"What are you doing, grow a pair and attract more demand caramel!!!"
"Market Neutral Goes South"
Scenario A
"Dang, chocolate cone price did go down, yet I didn't short enough of it to offset the lost I took on caramel go down at the same time!!!"
Scenario B
"Dang, caramel cone price did go up, yet I didn't long enough of it to offset the lost I took on chocolate go up at the same time!!!"
Scenario C
"Chocolate keep skyrocketing, caramel keep plunging down...Oh well, I guess I shouldn't've told them how to run their own business, huh?"
For Market-Neutral Concepts & Strategy Discussion Only, thanks.
Two ice-cream vendors approaches your house
One sell chocolate for $5 the other caramel for $2
The trader inside you scream like a maniac: how could you charge so much for a chocolate cone while your competitor priced much lower?!
"Outright"
Scenario A
“Let me tell you how to run a fair price business ---I bet your price will go down, I'm shorting 10 contract of you vicious chocolate man!”
Scenario B
“Let me tell you how to run a profitable operation ---I bet your price will go up, I'm longing 25 contract of you my venerable caramel buddy!”
"Spreading"
“Let me tell you how to run a fair price business ---I bet your unjustifiable price will go down, I'm shorting 10 contract of you, vicious chocolate man! In the mean time I'm longing 10 contract of your competitor!"
"Market Neutral"
"I'm shorting 10 contract of you while longing 25 contract of your caramel competitor!"
"Outright Goes South"
Scenario A
"Wait wait wait, your chocolate cone's price keep rising and there are more suckas willing to pay for that???"
Scenario B
"What are you doing, grow a pair and attract more demand caramel!!!"
"Market Neutral Goes South"
Scenario A
"Dang, chocolate cone price did go down, yet I didn't short enough of it to offset the lost I took on caramel go down at the same time!!!"
Scenario B
"Dang, caramel cone price did go up, yet I didn't long enough of it to offset the lost I took on chocolate go up at the same time!!!"
Scenario C
"Chocolate keep skyrocketing, caramel keep plunging down...Oh well, I guess I shouldn't've told them how to run their own business, huh?"
For Market-Neutral Concepts & Strategy Discussion Only, thanks.
No Highs? No Lows? Must be Bose!