Controversy Project
A private equity company is a management institution specializing in non-public offerings and plays an important role in the capital market. Its trading strategies are diverse and flexible. They employ a variety of trading strategies to capture alpha, but most investors have little understanding of the trading strategies of private placements**. This article will reveal the five mainstream trading strategies common to private equity companies, and take you to understand the trading strategies of private equity companies.
1. Long-short hedging strategy, long-short hedging strategy is one of the more complex strategies in private placement. It works by trading both long and short positions to achieve the goal of stable earnings when the market is volatile. That is, **some** long, or sell some ** short through securities lending, or use stock index** or financial derivatives to hedge when going long and short. This strategy is more demanding for investors and requires strong trading skills and market insight. In the long term, it accounts for the first place in international hedging**. The long-short hedging strategy can be very large in terms of capacity, such as Warren Buffett and Soros.
Second, the global macro strategy, as a common hedging strategy, basically uses ** to trade, such as **, natural gas and some countries' stock indexes**, these investments are mainly made according to the views of the economic and political development trends of different countries. The world's largest hedge**: Bridgewater**, is often considered one of the best in the global macro field.
3. Statistical arbitrage strategy, that is, the use of purely statistical characteristics. Make some pairs or trade against a basket of **. Pairs trading is a very classic strategy in statistical arbitrage. Their guidelines are simple, let's say you hold a pair of A and B, and they have a potential economic connection, such as two companies that may produce the same type of product, or two companies that are on the same chain. Quantitators will use this kind of economic connection to model it mathematically, looking for trading opportunities from one ** abnormal movement. There is an obvious problem with statistical arbitrage that the capacity cannot go up, and the capacity is very limited. Many people often compare Simmons's Renaissance to Warren Buffett's Burkel Harvard, and think that Simmons' medallion** has earned a return of nearly 30% over the years that is better than Buffett's. In fact, this is a very unscientific comparison, because the capacity of statistical arbitrage is limited. Renaissance is typically able to manage between $10 billion and $20 billion in assets. This and ba. The scale of assets under management by Warren Buffett is incomparable.
Fourth, the event-driven strategy, the event-driven strategy is a strategy that focuses on the use of major events to have an impact on the market in private equity. These events may include corporate acquisitions, restructurings, listings, dividends and other corporate events, and private equity companies select suitable investment opportunities through in-depth research on relevant events and market reactions. This strategy requires high information acquisition and judgment ability, and needs to capture market changes in a timely manner and make flexible decisions. Broadly speaking, any news, event, or announcement that occurs in the market that may be related to the ** market has the potential to become an event-driven investment opportunity. One of the best is Steve Cohen, the prototype of the American drama "Billions".
Fifth, the high-frequency trading strategy, this is the high-frequency trading that ordinary investors are more familiar with, such as the end of the market, such as the board. Some of them trade, some of them are **. This strategy is usually very rewarding, but it is also very risky, and it is not uncommon for ultra-high returns of more than 10 times, but there is also an obvious problem, that is, the capacity is very small, and the scale of assets that can be managed is limited. This strategy was used in the documentary "The Million Dollar Trader".