What to do if you are fund manager?

Discussions about personal psychology for the individual trader.
Roundtable Knight
Roundtable Knight
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Post by fab1usa1 »

I don't know if this answers your question but...

One of the advantages of being a small investor is that I can trade low average volume stocks, meaning that I can buy and sell without moving the market.

If I have lots of captial, like a fund manager, I say don't trade low average volume markets. In other words, add a parameter to your Portfolio Manager that sets a minimum average volume.

Roundtable Fellow
Roundtable Fellow
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Post by huss1652 »

A smart manager would not hold a position that is 50% of daily volume. I use daily volume restrictions when trading. I never hold more that 5% of daily volume and that is high in my opinion.

The only option I could see at this point is to hedge a large chunk of your position and start selling small chunks of your position each day, lets say 5% of market volume a day. If the instrument does not have options to hedge, you may try to find strong correlated instrument and hedge with its options. You will not be able to hedge "perfectly" but it will remove a large amount of risk.

Roundtable Knight
Roundtable Knight
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Post by oem7110 »

Thanks everyone very much for suggestions

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