Opportunistic strategies: global macro and managed futures CFA Flashcards - Medical Study Cards
Master Opportunistic strategies: global macro and managed futures with Oncourse flashcards. These spaced repetition flashcards are designed for medical students preparing for NEET PG, USMLE Step 1, USMLE Step 2, MBBS exams, and other medical licensing examinations.
Opportunistic strategies: global macro and managed futures Flashcard Deck - 10 Cards
Flashcard 1: What are opportunistic HF strategies?
Answer: - top-down approach often spanning multiple asset classes & vary with market conditions
- returns impacted by market cycles, global developments and international interactions
- can use technical analysis or fundamental analysis
- can use a systematic and discretionary
- subtypes: global macro, managed futures
Flashcard 2: HF strategies with high sharpe & sortino ratios:
Answer: - systematic futures
- equity market neutral
- global macro
- event-driven
Flashcard 3: Describe a carry trade's return distribution
Answer: negatively skewed, fat tails
Flashcard 4: What is a managed futures HF strategy?
Answer: - take long/short positions in futures, forwards, options on futures, swaps & currencies/commodities
- enter derivative contracts, not buying asset
- fund uses 1/8 of its capital as collateral on futures contracts, the rest is invested in a highly liquid security that can also servce as collateral for the futures clearing house
- highly liquid (futures trade globally and continously)
- subject to "crowding": many pursue same trades
- size of positions based on correlation and volatility
- Little correlation with traditional equity & fixed-income assets
- exit methodologies based on price targets, momentum reversal, time, trailing stop-loss
Flashcard 5: HF strategies with smallest max drawdowns:
Answer: - global macro
- systematic futures
- merger arbitrage
- equity market neutral
Flashcard 6: What are multi-manager HF strategies?
Answer: - use other HF strategies as building blocks, combining different strategies together and rebalancing exposures over time
- subtypes: multi-strategy funds and FofFs
Flashcard 7: What are specialist HF strategies?
Answer: - risks of these strategies arise due to exposure to specific sectors or unsual securities
- subtypes: volatility strategies an reinsurance strategies
Flashcard 8: If the deal is expected to go through in a merger arbitage...
Answer: long target company and short acquisition company
Flashcard 9: What is a dedicated short and short biased HF strategy?
Answer: - dedicated short: seek out securities that are overpriced (60-120% short)
- short biased: same as dedicated short but offset by a long exposure (30-60% short)
- seeks to produce a negative correlation with conventional securities
- expectations of returns to be lower, tend to have greater volatility
- little leverage used
Flashcard 10: HF strategies with high stdev:
Answer: - event driven (distressed securities)
- relative value (convertible arbitrage)
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