Q&A by Don Bright
EXIT STRATEGIES AND FAIR VALUE
Two questions: A while back you had
some postings regarding some of your
“seasoned traders” who were entering
several hundred orders on the opening
each day. Would I be correct in assuming
they use some sort of automated exit
strategy? They couldn’t possibly trade
their positions individually, as you seem
to do. How do they execute this?
Second, someone posted something
to the effect of holding onto a position
well after the opening because “…the
premium [is] out of whack of fair value
[and] …arbitrage will eventually pull
things back to fair value.” I thought
there was no fair value after the opening.
Otherwise, it seems, you would be
constantly calculating and holding positions
much longer than you seem to
hold yours. I look foward to your comments.
Thanks — Mitchell Berkowitz