Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

Headline Damage

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Market overreactions following bad news headlines are usually temporary and can provide the basis for a profitable contrarian trading strategy.

On the 4th of February 2013, a news story broke that the U.S Justice Department was pressing a civil suit against credit rating agency S&P Global for allegedly fraudulently colluding in the subprime mortgage crisis after it failed to rate mortgage bonds adequately prior to the crisis.

In response to the news, S&P Global’s shares tumbled, as can be seen in the price chart below.

market overreaction
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Shorts and Wirecard

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Short sellers have been raking it in on their Wirecard shorts, but most haven’t cashed their positions out yet. Analysis from one firm shows that just 12.5% of Wirecard shorts have been covered over the last week, which means most short sellers are letting their position ride in hopes of further declines.

Wirecard stock was already tanking after the company said billions of dollars was missing from its balance sheet. Then the ADR shares of Wirecard plummeted another 74% today into penny stock territory after the Germany company announced that it has begun insolvency proceedings.

The company announced today that it will file for insolvency proceedings in Munich “due to impending insolvency and over-indebtedness.” The announcement comes after Monday’s announcement that the US$2.1 billion that was previously believed to have been missing from the balance sheet probably didn’t exist.

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Phase 1 Compliance

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Following Trump’s election win, I read two books to better understand him and his behavior: Games of Strategy: Theory and Application and The Art of the Deal.  The game theory book was intended to understand how Trump thinks.  However, he is extremely volatile and that makes it difficult to predict his behavior thus it was difficult to apply theories to his decision making.  The Art of the Deal, however, was much more insightful.  In an old email I characterized him as:

“He (Trump) is a winner.  Looking strong is important.  He’s also incredibly sneaky and untrustworthy (whatever it takes to win…)…In other words Trump uses last minute tactics to: A) strengthen his position and B) ensure his position is not weakened…As an options trader he’s a wing buyer that bullies the market to make his position in the money.”

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Half the Gold Reserves

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Almost half of the global gold reserves are controlled by just 10 countries and institutions, according to a new study. The study reveals that the U.S. is far ahead of other countries in terms of gold reserves, even well above countries like Russia, whose central bank has been a buyer of gold for quite some time.

Buy Shares reports 49.37% of global gold reserves are held by nine countries and the International Monetary Fund. Total global gold reserves amount to about 1.85 billion ounces, and the top 10 countries and institutions are holding about 913.29 million ounces.

The U.S. is in first place with 286.87 million ounces, amounting to 15.5% of global gold reserves. Germany is in second place with 188.63 million ounces of the yellow metal, or 6.4% of the total supply.

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FICC Short Gamma

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One firm rakes more money trading energy in three-months then this entire industry 90th percentile in one year, it’s Goldman Sachs. For us Goldman FICC unmitigated success in the energy is the ultimate expression of the systemic dollar-at-risk entrenched in the long-gamma commodity firms and trade finance world.

Goldman’s Model

Goldman banks/deals with the solid counterparty, manage their risks, and then trade the insights 1/4 sec ahead of the earnings or physical in the finish line.

Goldman uses few or no working-capital.

Goldman commodity traders raked in $1 billion after positioning for april’s oil market collapse from Simon Jacques

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