(#36) Things to write about

Things to write about:
- what do i want to learn more about?
- what do i want to remember?
- what is interesting to me?
- share meaningful first hand experiences

some fundamentals to refresh my brain

Algorithmic Trading: also called automated trading, black-box trading, or algo trading uses a computer program that follows a defined set of instructions (an algorithm) to place a trade.

• process for executing order utilization automated and pre-programmed trading instructions to account for variables such as price, timing, and volume.

Assets: cash and cash equivalents, equity and debt securities, advertising contracts

• less liquid or illiquid assets are assets that can’t all be easily sold at their current market price, due to lack of liquidity (buyers) willing to pay the amount of the asset at current price.

  • when one is forced to sell or (liquidate) large amounts of an illiquid asset at once, the assets price is forced down in search of willing buyers at lower prices, resulting in the seller receiving less than they might have expected.

Auto-deleveraging (ADL): if a position can’t be liquidated at a price better than the bankruptcy price, the exchanged ADL system can delevrage an opposing position from a designated trader. this is useful in cases where the insurance is insufficient to cover any loss incurred on the contract.

Insurance Funds: should holdings fall below maintenance level (margin), insurance funds help traders to preserve their funds from ADL

Broker: intemediaries that have the authorization to buy securities on an investors behalf - includes securities, stocks, mutual funds, ETFs, and real-estate.

• mutual funds & ETFs are similar products in that they both contain a basket of securities (such as stocks or bonds)

• brokers must register with FINRA (vs investment advisors register through the SEC as an IRA)

Capital gains: increases in the value of an investment itself, and are often not available to the owner until the investment is sold

Capital markets: refers to venues where funds are exchanged between suppliers and those who seek capital for their own use.

• suppliers in capital markets are typically banks or investors while those who seek capital are businesses, governments, and individuals

• capital markets are used to sell diff financial instruments, including equities and debt securities

• those markets are divided into 2 categories: primary and secondary markets

• the best known capital markets are the stock market and bond market

Crypto pairs: assets that can be traded for each other on an exchange.

• some cryptos can only be bought with other cryptos. understanding crypto pais allows investors to exploit arbitrage opportunities.

Derivatives trading: derivatives is any product or contract with a value determined by an underlying asset

• types of derivatives in crypto:

  • crypto futures: futures involve an agreement between a buyer and a seller to sell an asset in the future. the specific date and amount are agreed on ahead of time.

    • popular with institutional investors. data from the futures are typically used to predict future price movements and market sentiment

  • crypto options: derivative contract that allows a trader to buy or sell a specific commodity at a set price on a future date. unlike futures, options allow the buyer the opp to not buy the asset if they choose

  • perpetual contracts: popular among day traders. perp contracts don’t have an expirary date unlike futures and options. positions can be held as long as a trader wants, provided they pay the holding feed, called the funding rate. this account must also contain a min amount, called a margin.

Ephemeral: lasting a very short time

ETL (extract, transform, load): 3 phase process where data is E,T,L into an output data container. data can be collated from one or more sources and outputted to one or more destinations.

Exotics: option contracts that differ from traditional options in their payment structures, expiration dates, and strike prices. can be customized to meet the risk tolerance and desired profit of the investor.

• generally more complex than “vanilla call and put options”

Funding rates: periodic payments either to traders that are long or short based on the diff between perp contract markets and spot prices. therefore, depending on open positions, traders will either pay or receive funding.

Hedge fund: can accept investments from only a small number of wealthy individuals or big institutions

• in return, its freed from most types of regulation meant to protect consumers

• allow for agro investment strategies that allow for v large returns

High-frequency trading: method of trading that uses powerful computer programs to transact a large number of orders in fractions of a second. uses complex algorithms to analyze multiple markets and execute orders based on market conditions

Limited partnership (LP): partnership made up of one or more partners

• one is general partner that oversees and runs the business

• limited partner is an investor, not a day to day manager of the business, their liability cant exceed the amount invested in the business

Long/short ratio: futures market data

Long-tail: content or product in low demand, sales, and volume

will add more…. later

Why the Web Won't Be Nirvana - this bear market can be depressing a good reminder…

Bitcoin and me (Hal Finney) - fire read honestly so fascinating and inspiring, goes with the gas up for the bear market

Ordinals, Inscriptions, and Rare Sats - Oh my! - best run down on ordinals i’ve read