Thursday, June 30, 2016

Another dumb uninformed article from CNBC / Wall Str Journal

CNBC claims machines had advantages over humans in Brexit trading because they are not "emotional" and that humans have "projection bias" and "hope" for a positive outcome.  Totally uninformed crap.  Here's the link:

This article is total BS.  People weren't guided by "hope" for a positive outcome.  Most traders i know love chaos in the markets because there's the possibility of making money if the mkt collapses rather that melts up. There is no "projection" bias crap in this case, rather just a lot of polling propaganda that steered peoples' expectations into thinking bremain would win out.  Fact is that a lot traders thought there was no way brexit would win, that even in the small chance brex woulda won that they would've RIGGED the polls in favor of EU.  Also, no one thinks bremain was a positive outcome for anyone but the elites and stock markets.  And lastly i will add, this article is misleading, most algos actually lose money, they are programmed by losers in general, and the code has to be constantly tweaked.  

The big winner that keeps getting carted out in the media is Soros.  But they fail to mention that Soros trades on insider information and loves to capitalize on world destruction.

As far as CTA's winning because they have computers trading for them, ridiculous assertion.  Big CTA's put hedges on before a big binary event to balance out their deltas and hedge their long book.  The vix started spiking 2 weeks before the referendum, prior to that the S&P options had volatility premiums way in the low end of their spectrum.  Big hedge funds were buying OTM puts when they were cheap.  Doesn't take a computer / genius to figure that one out. 

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