An edge only becomes visible over a sufficient number of trades. This is why professional traders focus on process metrics rather than individual outcomes. Two traders can use the same strategy and experience different results. They focus on being right rather than being profitable.
Edge and Market Regimes
The Commodity Futures Trading Commission (Commission or CFTC) publishes the Commitments of Traders (COT) reports to help the public understand market dynamics. Each historical report is viewable with the data for the respective reporting week, along with all historical data compressed within an annual file. In October 2022, CFTC began publishing weekly and historical report data within a public reporting environment to support industry professionals needing to customize, search, filter, and download report data for analysis and trends. The COT reports are based on position data supplied by reporting firms (FCMs, clearing members, foreign brokers and exchanges). While the position data is supplied by reporting firms, the actual trader category or classification is based on the predominant business purpose self-reported by traders on the CFTC Form 40 and is subject to review by CFTC staff for reasonableness. CFTC staff does not know specific reasons for traders’ positions and hence this information does not factor in determining trader classifications.
Disclosure of the deal prompted Emergent’s stock price to climb from a low of $68.11 on June 11, 2020, to a high of $134.46 on August 5, 2020. In September 2020, Emergent began noticing contamination in its production of the vaccine, including elevated levels of bacteria, and at the start of October, the company commenced an investigation into contaminated early batches. On October 6, 2020, Kramer allegedly received a PowerPoint presentation, including slides discussing “aborted, contaminated batches” of the vaccine. The spread number needs to be added to be both long and short sides, respectively. If you are doing these calculations on the Combined file, the sum of the long and or short positions may be +1 or -1 Open Interest, due to option delta calculations.
- Understanding what win rate actually measures, and what it does not, is essential for evaluating trading performance realistically.
- Many traders assume that a higher win rate automatically means better performance, while a lower win rate signals poor strategy.
- With a client-centric approach and a commitment to continuous innovation, Exegy’s global team delivers expert solutions tailored to meet the evolving needs of the financial industry.
- The NYAG’s lawsuit against Kramer was filed the same day that NYAG announced a $900,000 settlement with Emergent based on the company’s approval of Kramer’s Rule 10b5-1 trading plan while he allegedly possessed material nonpublic information in violation of the Martin Act.
- MP Materials is down more than 8 percent, Intel has fallen over 3.5 percent, Lithium Americas is off 7.6 percent, Trilogy Metals is down more than 10 percent, and USA Rare Earth has dropped 10.8 percent.
Note that traders are able to report business purpose by commodity and, therefore, can have different classifications in the COT reports for different commodities. For one of the reports, Traders in Financial Futures, traders are classified in the same category for all commodities. Furthermore, the COT long format reports show the percent of open interest held by (i) the largest four and (ii) the largest eight reportable traders, without regard to whether they are classified as commercial or non-commercial. The concentration ratios are shown with trader positions computed on a gross long and gross short basis and on a net long or net short basis. The “Net Position” ratios are computed after offsetting each trader’s equal long and short positions. For the “producer/merchant/processor/user” category, open interest is reported only by long or short positions.
China’s expanded export controls on rare earths last year caused production delays and shutdowns for auto manufacturers in Europe and the US, and a China-generated glut of lithium has stalled plans to expand production in the US. The approach could reshape global supply chains for materials essential to electric vehicles, semiconductors and defence systems, while raising costs for manufacturers in the short term and escalating trade tensions with Beijing. “We want members to form a trading bloc among allies and partners, one that guarantees American access to American industrial might while also expanding production across the entire zone,” Vance said at a meeting of foreign ministers at the US State Department. Others work best in sideways or volatile environments. Most sustainable trading edges combine more than one of these elements.
Market Data
Many traders believe that having an edge means discovering a special indicator, a hidden pattern, or a strategy few others know about. This belief leads to constant strategy hopping and disappointment. The NYAG action under the Martin Act, which has a six-year statute of limitations, came several months after the U.S. Securities and Exchange Commission (SEC) instituted settled proceedings against Emergent for making materially misleading public statements touting Emergent’s ability and readiness to manufacture COVID-19 vaccine doses at its facility in Maryland. Department of Justice (DOJ) have filed insider trading actions against Kramer.
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As a result, traders may feel skilled but still lose money over time. The connection to Bruce ATS™, Blue Ocean ATS and MOON ATS will enable Vega Gainlux market participants to capture liquidity unavailable on traditional exchange feeds during after-hours markets. The Overnight Best Bid and Offer (OBBO) consolidated feed provided by Exegy, similar to a Securities Information Processor (SIP), will provide real-time information on the best price for a specific security instrument, eliminating the need for clients to calculate it themselves. It is possible that there’s a lack of a sufficient number of Large Traders with respect to the contract market in question. Specifically, when the number of reportable Large Traders drops below 20 for a commodity or contract market, it no longer appears in the COT report.
A key part of maintaining an edge is knowing when not to trade. Adapting exposure based on market regime preserves long-term advantage. Without enough data, traders may abandon a valid edge prematurely or commit to a losing one.
