Ming Zhao
@FabiusMercurius
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ex-Point72, ex-cyber hacker; master @ lock-picking, questionable @ stock-picking; i like maths
San Francisco, CA
Joined March 2016
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Each week I write a 🧵about investing, startups, or a cool market segment. All of it is knowledge my mentors & friends have taught me over the years.
🙏💗Now I'm passing it forward.
Here's a megathread of all past & future 🧵s. I'll be updating as we go. If you <3, plz share!
👇
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Day in the Life of a Hedge Fund Analyst
Few live to tell the tale.
"Was it like Billions?"
"Describe ur investment process?"
"What did u learn?"
I get these questions all the time, but for a while I was afraid of answering publicly. No more!
Hedge fund story time.
👇
🧵/
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🏦📉 SVB Crash Explained📉🏦
Silicon Valley Bank—
#16
largest US bank with $212B — just crashed 60% in 1 day & fell 22% post-close. Stock halted now.
@BillAckman
is calling a US gov bailout.
@peterthiel
is calling a bank run.
JPM, BAC, WFC all dropped 6%.
What's next?
Is this
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🧐How to Read 10Ks Like a Hedge Fund🧐
“Fundamentals don’t matter anymore!” I’ve heard this a lot lately on Fintwit.🙄
But, for those who’ve diversify beyond $GME and $DOGE, here’s a primer on what metrics fundamental buy-side PMs look at and why:
(real examples outlined)
👇
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A Breakdown of the Hedge Fund Industry
"Ok stupid question, what *is* a hedge fund?"
I get this question all the time.
It's NOT a stupid question.
The hedge fund industry is so damn secretive & every primer out on the internet sucks.
Here's a comprehensive breakdown.
👇
🧵/
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🇨🇳Evergrande's Backstory🇨🇳
🌎 The world demands answers.
From Fortune 500 to 1.95 Trillion in debt: How did China's
#2
real estate giant get to this point?
How much cash does it *actually* have?
Will there be a bailout?
Who's gonna get f*cked?
Here goes. Story time.
👇
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🧵12 Threads for Learning to Trade Options🧵
Stop wasting ur time and money on 600-page textbooks & 2 yrs of MBA.
The BEST RESOURCES on options trading come from actual pro traders, many of them right here!
A syllabus of 12 threads/pods/blogs to grow your knowledge & PnL:
👇
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2K
6K
What is a Credit Default Swap?
(and wtf is going on with Credit Suisse?)
"Lehman-like collapse" flooded the news this week as spreads on $CS hit 2008 levels.
But first, what is a CDS spread? What # is "bad"?
Quick breakdown on what this all means and why it matters:
👇
🧵/
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A Crash Course on How To (Properly) Trade Options
90% of investors don’t trade options out of a misunderstanding that they’re “too complicated.”
The system brainwashes us w/ “options are too risky” BS, then spews out shit learning material so that ofc u lose money.
🧵/
👇
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China's 2nd largest real estate developer just defaulted.
Debt crossed $600B USD
Note: Lehman was liquidated for $600B, also owned by many international banks. Ripple effect soon to come.
TRADE: short RMB because likely China will devalue its currency to bail out Evergrande.
Mass protests against Chinese real estate company Evergrande in Shenzhen amid possible bankrupcy
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Dissecting the Impending CRE Crisis
Soon u'll hear a lot more on CRE.
Why? B/c US banks & PE firms are headed for real estate doomsday.
4 collapses in 11 days
$270B in CRE loans due EoY
$3B+ defaulted in March 2023 alone
What is CRE & why does it matter?
What's next?
👇
🧵/
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💰How PE Firms Make Money💰
Chobani, Bumble, Dell—many of ur favorite brands are PE-owned.
Every time u shop, go on a date, turn on the💡—some KKR tycoon's getting filthy rich.
How does it all work?
WHAT IS PE & HOW DOES IT MAKE $?
How is it different from a hedge fund?
👇
🧵/
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607
3K
Exposé on the Dark Side of Market Structure
3 wks ago the SEC proposed a groundbreaking reform that could cut trading costs by >50%.
HUGE SHIT.
How did investors react?
Crickets🦗
Turns out <1% understood what's happening: how "market structure" works today.
Story time
👇
🧵
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594
2K
Yield Farming is a Misnomer
There. I said it.
Earning yield/ "LP"ing is marketed as "passive income" as if risk-free, but in fact that's a traitorously inaccurate sales pitch for what it ACTUALLY is:
Covered options writing.
An exposé on the real risks & returns👇.
🧵/
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457
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Optimal Trade Sizing
Once upon a time I had a friend, Chad.
Chad was great at stock-picking: 69% winners!
I copied all his trades but chose my own position sizes.
His PnL: 420%
My PnL: -5%
Wut happened?
👇
KELLY CRITERION: A SIMPLE STRATEGY TO MAXIMIZE RETURNS VIA BET SIZE
🧵
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A Breakdown of Investment Banking
How do I get a job in IB?
What resources should I read?
What are the different functions / groups?
What's day-to-day life like as an analyst, associate, VP, MD?
👇
🧵/
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🔎How to Read a Term Sheet
VC term sheets are one of the most talked-about & least-understood docs in existence.
What's dirty, what's standard?
Whether you're building a company or thinking about it, as founder or employee:
Here's what the VCs know that you need to know👇
🧵/
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The Hedge Fund Guide to Industry Analysis
100% of hedge funds, VCs, founders & strategy execs do market research.
95% do it wrong.
That's why they invest in, build & buy shitty companies.
Follow this blueprint from the top 5%:
A 9-Step Guide For Analyzing Any Industry
👇
🧵/
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10 Under-the-Cover Trading Hacks
This is not a let-me-repeat-Warren-Buffett thread. There is zero alpha in that.
The 10 trading strategies below are super underrated. Nothing on Google/Reddit/etc. about them.
👇
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14 Knowledge-Packed 🧵s on Fundamental Analysis
Becoming a great long-term value investor is difficult, but luckily it's very learnable for a disciplined mind!
Here are some amazing resource on:
- financial statement analysis
- how to model companies
- growth metrics
& more!
👇
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👁️Hidden Intel Trapped in Options Chain Data👁️
"Options are too mysterious."
- Said 99% of equity traders.
Sadly, the 99% don't realize that there is REAL JUICY ALPHA hidden in plain site if one just learns how to make sense of options chain data.
THE INTEL U WERE MISSING👇
🧵
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🪞How Hedge Funds Do Post-Mortems🪞
"Pain+Reflection=Progress" ~Ray Dalio
The post-mortem is the hedge fund PM's leg day: can't skip.
Done right, it's a systematic exercise that mega boosts performance. Yet ppl never explain how to do one.
So
@SeifelCapital
(CS) & I teamed up
👇
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Where does YIELD in crypto come from?
It's 2021.
😡 $1 in Chase earns 0.05% APY.
😲 1 UST in Anchor earns 20% APY!
🤯 1 UST in a market-neutral fund running 50x levered BTC contango trades earns >300% APY!
How are crypto yields SO DAMN HIGH, and is this sustainable? 🧵.
👇
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10 Investing Books That Changed My Life & PnL
Here's how I learned to understand markets.
Start by learning the trading strategies & decision-making building blocks of:
- macro
- value
- quant
- high frequency
The market is literally the sum of their actions.
🧵
👇
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Net Income vs. "Adjusted Net Income"
Just met a trader who's up 350%+ in 2022!
His strategy:
1. Look for one-time expenses the Street is missing.
2. Recalculate adjusted net income.
What's that?
Let's do a deep-dive.
👇
7 One-time items an investor should NEVER overlook.
🧵/
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Corporate Debt: A Need-to-Know Guide for Equity Investors
1/ Get a cup of coffee.
In this thread,
@10kdiver
and I explain how & why you should add corporate debt analysis to your investment research.
👇
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📈Investing through inflation: What to buy? What to avoid?📈
Everyone’s talkin bout it. Dalio, Druck, Buffett. Even ur local lumberjack.
Is exploding inflation a real concern or just another cock-n-bull from 2008 PTSD? And most importantly, how can you win with ur portfolio?
👇
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🙈5 Startup Lessons I Learned The Hard Way🙈
6m ago I left as CTO/co-founder of my first startup. We'd been nose-to-the-grindstone for the last 2+ years but results weren't close to expectations.
Here are my biggest mistakes & takeaways so that hopefully you avoid them.
👇
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Jim Simons’ Playbook: the King of Quant
90% of active managers fail to beat the market, but Medallion boasts >40% annualized returns, 98.5% in '00 & 82.4% in '08.
What gives?
Hint: it's more than math.
No one knows current strategies but here's what we've learned from past👇
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Nvidia is about to become the 1st trillion-dollar chipmaker, after surging $200B in valuation in a single day.
But when cofounders Jensen, Chris, & Curtis started the company in 1993, they had only $40K in the bank.
Here’s Nvidia’s founding story, from 0 to Taxman of AI.
👇
🧵/
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🉐 12 Crypto Hedge Fund Trading Strategies 🉐
They make 4000% ARR.
You make 40%.
What’s their secret sauce?
What are the pros doing that’s so different or smarter than you??
And where might you have an edge that they don't?
HOW TO WIN. 12 strategies.
👇
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Why & how to "link" the 3 statements:
The reason why analysts stack all 3 on top of each other is cuz all interwoven:
- net profit:
flows from bottom of IS to retained earnings in BS & first line of CFS
- working capital:
from CFS, is the diff btw current assets & liabilities
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🕸️Inside the Ransomware Economy🕸️
Ryuk is the biggest Saas unicorn u've never heard of.
$150M ARR.
3 yrs old.
Maybe it’s taboo to learn business strategy from a cybergang. But the ransomware industry-- from supply chain operations to market microstructures-- is truly genius.
👇
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11/ 12AM Existential Musings
Wonder if ur life would've turned out easier if u'd taken that Google software engineering internship instead of GS banking internship sophomore year in school.
JK.
Life is way more exciting now & u'll never regret it.
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What is Chapter 11 Bankruptcy
FTX infamously collapsed this week from a $32B empire to filing for chapter 11 bankruptcy.
What does that mean?
Is FTX now worth ... 0?
What happens to BlockFi, Voyager, LedgerX & all its other investments?
👇👇
CHAPTER 11 BANKRUPTCY EXPLAINED
🧵/
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Post-Evergrande: China's Waterfall of Pain
China itself is one big Evergrande.
One big debt crisis.
For years massively over-levered shadow banks masqueraded as propcos, got drunk on credit, flirted w/ default & called for bailout like a late-night uber.
Contagion has begun
👇
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300
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Designing an Exchange
(Order books, AMMs, RFQs)
Exchanges are the market's DNA. Details of their inner workings determine all downstream trading dynamics.
A 🧵 on the different exchange microstructures and their mechanisms for order matching & market-making.
👇
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13/ Who wins & who gets f*cked under each scenario?
It's quite simple.
The state always wins because it'll be first to get paid and will always be able to force management to make decisions at the expense of every other stakeholder group.
Everyone else gets f*cked.
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🍿🎥AMC Gamma Squeeze Explained in 3 Pictures🎥🍿
Best time to learn about gamma squeeze was for $GME.
2nd best time to learn is now. For $AMC.
You don't needa understand gamma, vega, vanna, theta. You just gotta understand 3 simple pictures.
👇
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14/ Here are the primary source documents I used in my research in case anyone wants to do further digging:
2020 annual report (not a 10K because China doesn't abide by GAAP accounting):
Happy weekend! 😃
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👺12 Ways to Spot a Lying CFO👺
🤝collaboration w/
@goodalexander
Stocks move on earnings, so execs will manipulate earnings. How can u spot their accounting gimmicks ahead of time?
Here’s a rundown of top shenanigans execs use(d) to cook their books. Case studies included.
👇
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Crypto Market Map 101
(aka a hierarchical DeFi-TradFi mapping)
If ur a:
- crypto newbie
- confused by who's who & what they all do
- dying for someone to draw parallels btw defi & tradfi infra
- crypto entrepreneur looking for opps
I made this map for u:
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🎚️ What is Risk Premia? 🎚️
Be honest: Are u a GOAT trader?
Or did you just make 40% returns being long tech stocks through COVID? What is a good way to assess one's trading performance anyways?
In this 🧵 let's deep-dive on α, β, & their importance in measuring returns.
👇
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8/ 4:30pm Post-Mortem
Markets just closed, so u got some reflecting to do:
Any major gains?
Any major losses?
Why did the moves happen?
Did u anticipate them?
How can u better anticipate & respond going forward?
See 🧵 below on how to do a post-mortem:
🪞How Hedge Funds Do Post-Mortems🪞
"Pain+Reflection=Progress" ~Ray Dalio
The post-mortem is the hedge fund PM's leg day: can't skip.
Done right, it's a systematic exercise that mega boosts performance. Yet ppl never explain how to do one.
So
@SeifelCapital
(CS) & I teamed up
👇
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Visiting NYC. Observations:
- In NYC, engineers pretend they're bankers.
- In SF, bankers pretend they're engineers.
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Here's a checklist of top items to check per company:
- Any earnings calls this week?
- Any product releases?
- Any new sell-side reports? Downgrades/Upgrades?
- Any M&A rumors in the space?
- Any management change announcements?
- Any guidance revisions?
- Any legal happenings?
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6/ 11AM - 3PM: Read/make/revise financial models
This is the crux of ur job.
So lemme describe what exactly this entails.
A "financial model" is just 3 accounting statements stacked on top of each other in Excel:
- income stmt (IS)
- cash flow stmt (CFS)
- balance sheet (BS)
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How Companies Build Moats
Everyone *claims* they have a moat. But moats are one of the most criminally misunderstood topics for investors and founders.
11 types of business moats
(& how to sniff out the phonies, with real examples)
👇
🧵/
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🌴💰🍸⛵️ Tax Evasion For Traders & Founders: How Billionaires Pay Less Than Secretaries
With tax season around the corner, here’s a compiled list of (mostly legal) hacks to reduce your future bleeding.
👇
P.S. Not a lawyer. If you’re the IRS, don’t kill the informed aggregator
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DEBT IS SEXY.
Broke: Debt is for poor people.
Woke: Taking on debt is a weirdly smart thing to do in 2022.
Bespoke: Debt is the best kept secret separating the upper-class from middle-class.
🧵 on HOW DEBT CAN MAKE U RICHER
- as a trader
- as an entrepreneur
- as a business
👇
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9 Ways Retail Traders Gain Edge over Hedge Funds
🔥Hot take 🔥: Wall St. tries to hide this -- but in more ways than one the small fry actually have big systematic advantages against the sharks.
How to weaponize the dealer's strategies & constraints against him:
👇
🧵/
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6/ But it didn't just stop at football.
The "real estate dev" also established an entire subsidiary for electric vehicles ("Evergrande Auto"), another for streaming media ("Hengten Networks"), an amusement park ("Evergrande Fairyland") & health chain ("Evergrande Spring").
Wut?
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Why Ukraine's Crisis is Killing Your Portfolio:
Explained in 4 Pictures
🧵/
👇
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8 Underrated ChatGPT Prompts for B2B Sales
(with real examples, each scored #/10 on usefulness & accuracy)
👇
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BREAKING:
Another wrinkle in the regional banks / $SIVB / $SBNY saga.
Retail investors about to lose $𝟑𝟏𝟎 𝐌𝐈𝐋𝐋𝐈𝐎𝐍 𝐓𝐇𝐈𝐒 𝐅𝐑𝐈𝐃𝐀𝐘— $130M on SVB + $180M on SBNY.
But NO ONE is talking about it.
WSB mods are even censoring posts about it.
What’s going on?
👇
🧵/
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FACTOR-BASED INVESTING
#1
Worst mistake beginner traders make: they look at returns instead of *risk-adjusted returns* (starting in a bull market).
Only by understanding the the underlying factors of your portfolio can you ensure *sustainable* returns, in bull or bear.
👇
🧵/
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1/ ⏰ 6AM Pre-Market Review
Wake up thinking about ur overnight positions.
What happened during London/Asia trading?
Scan the major news on ur way to office.
🏢🚕🚶♀️
Think about how ur getting screwed by beta (general macro, FOMC, inflation, etc.) cuz ur net long (or net short).
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📀Semiconductor Industry Primer💿
Semis are 🔥🔥 in 2021! But how to trade ‘em?
Hot take: chips are commodities. Trade like oil, not tech.
👇
1 Ecosystem overview
2 Supply chain
3 Key drivers
4 Key Metrics
5 Macro catalysts
6 What's going on in 2021? COVID run-up & sell-off 📈📉
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💻Tech Sector Primer: Catalysts, KPIs, Valuation Multiples & Red Flags 💻
The analyst next door won't shut up about the weather. "Cloud. Fog. Lakes. $SNOW!"
Soon it'll be animals. "Hive. Pig. Python!"
Welcome to tech, the most confusing sector w/ the most confused investors.
👇
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My BEST and WORST Options Trades
And the BIGGEST lessons I learned from them in 2021
(Part 2 of A Crash Course on How To Properly Trade Options)
🧵/
👇
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12/ So what can Evergrande do now?
1. Liquidate existing assets (i.e. land) for cash
2. Restructure contract terms to push out maturity
3. Debt to equity swaps
4. Sell more equity
5. Declare bankruptcy
6. Wait for bailout
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5/ 10AM Listen to XYZ earnings call
Every day a subset of the ~250 companies in ur universe will have earnings calls.
When start:
pre-market, during, or post-market
Structure:
- first CEO gives his spiel
- then CFO gives his spiel
- then sell-side analysts ask dumb questions
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3/ How did Evergrande land in such a shitty position?
To start, real estate developers are notoriously known to have terrible (i.e. long) cash conversion cycles. Long CCC means the company has tons of cash tied up in accounts receivables and/or inventory & therefore not "free."
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2/ According to the company's 2020 annual report, 674B ¥ (35%) is interest-bearing debt, which means it incurs new interest liability of 180+M ¥ every day!
Comparatively, it only has 158B in cash to repay all its short term debt + interest which means...
Major defaults to come.
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1/ First, how bad is the current situation?
There's not much info on Evergrande's finances on the Western web (aka Google) so I had to dig through the Chinese web (aka Baidu).
This poster shows China's top 3 most indebted real estate co's in 2020:
#1
is Evergrande (@ 1.95T ¥!)
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📉Why
#Inflation
Triggers A Sell-Off?📉
Today's news that CPI surged 4.2% sent equities and crypto markets to hell. But WHY??
What are the mechanics of how inflation affects equities, and why is tech falling hardest?
Here's a thread on inflation's 1st & 2nd order effects.
👇
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Found on LinkedIn
Big banks’ market outlook reports for 2023:
Goldman Sachs
J.P. Morgan
Morgan Stanley
Bank of America
BlackRock
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1/ Definition
A Credit Default Swap (CDS) is a bet on a company/country's chance of defaulting,
i.e. a put option on a bond.
CDS seller: "ABC won't default."
Sells protection for quarterly yield payments.
CDS buyer: "If ABC defaults, I want protection."
Pays quarterly yield.
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🏭Ray Dalio’s Economic Machine🏭
In 1983, McDonalds struggled to launch the McNugget. Chicken volatility was too high.
"How can we set fixed prices w/out risking billions?"
Hedge funder Ray Dalio cracked the code.
Here's how his economic machine solved McDonald's 🐥problem.👇
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5/ But while Evergrande was already disadvantaged from the get go due to the nature of its industry, mismanagement at the exec level certainly exacerbated its cash problem 100x.
Allegedly Evergrande spends 1-2B yuan on football every year. And in the last 10 yrs, it burned >20B.
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🤖What "alternative data" do hedge funds use?🤖
Dataminr just raised $475M at $4.1B valuation. 👀
For the last 10 yrs, hedge funds swarmed at "alternative data" like pigeons at bread crumbs. Why? What exactly constitutes alt data & does it actually generate investment alpha?
👇
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11/ What does the seniority waterfall look like? Who gets paid first? Who gets paid last?
1. the state (Evergrande's bank loans are state-owned assets & must be redeemed before all else)
2. suppliers (mostly in the form of commercial paper redemptions)
3. investors
4. employees
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Where do you get financial models from?
Typically, u buy from sell-side & modify as necessary.
Historical statements are found in all 10K/Qs. Easy to verify.
But what u really want to modify are the projections of FUTURE metrics.
After all this is the fundamental analyst alpha.
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🌷A Weird History of Options 🫒
One hot summer day in 4 BC, Greek mathematician Thales had an epiphany.💡
"There's an oversupply of olives this year!"
More olives 🔜More demand for olive presses.
Yet the market price hadn't changed.
"How do I arb this🤔?" thought Thales.
👇
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10/ 9:30pm Asian markets open
I will not check markets.
I will not check markets.
I will n---
HOLY SHIT! BABA DOWN 9% ALREADY?!?!
WTF tere's like no news.
Damn retail stocks!
U whip out ur laptop & start planning how u'll respond tomorrow. More post-mortems in the queue...🤦♀️
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📝How to Make Sense of Earnings Calls📝
You hear about the hottest earnings this week: $UPST, $ABNB, $PLTR, $DIS ... & excitedly tune in to your 1st call.
2min later. "What r they talkin' abt? How does this help me trade??"
So many metrics, which are important?
Here's a guide👇
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4/ Real estate companies tend to have long CCCs because it takes many months per project to get from an empty piece of land to a marketable building. All the while, construction is extremely capital intensive and the company needs to hold a ton of inventory & equipment.
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George Soros Investment Strategies Explained
So many ppl talk about Soros ("he broke the Bank of England!", "Reflexivity FTW!") but it's so hard to find clear, easy-to-follow explanations of:
- i.) what reflexivity actually means
- ii.) the significance in 2021
👇
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1/ How banks make money
Let's start at the beginning: SVB is a bank.
Banks make 💸💸 by taking in deposits & lending back out at higher rates.
This spread btw interest earned on loans vs paid on deposits is called NII (Net Interest Income).
NII is SVB's
#1
profit source: ~73%
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💱CROSS MARGINING is the next big thing in crypto💱
Today it's the most overlooked & misunderstood opportunity in all of DeFi, with TAM >$20B ARR.
If u don't *really* know what it is, chances are you're getting massively screwed on capital efficiency & don't even know it.
🧵/
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I plan to write a follow-up post tomorrow diving deeper on topics like:
- implied volatility
- my BEST options trades (what went right)
- my WORST trades (what i did wrong)
- corporate options trading
Please DM me if you have additional suggestions / topics u want me to include!
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End/
Here are some resources if you want to read up more on credit default swaps:
(Fed primer)
And here's Credit Suisse's fixed income investor update from Sept 2022 if you want to learn more about your favorite Swiss bank:
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👩❤️👨 Dating + Investing: The Same Game? 👩❤️👨
Men want 2 things.
1. Hot date 🔥 (or several)
2. Hot portco 🦄 (or several)
Turns out:
There's a famous game theory algorithm that maximizes ur chances of finding both.
It's called ...
👇
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10/ Does Evergrande have enough cash+EBIT to meet its interest + principal obligations for all shareholders?
No.
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9/ 7pm-9pm
[--- Insert Boring Mandatory Dinner Event ---]
U tell ur boss ur there for info gathering.
U tell urself ur there to hobnob in case book blows up tomorrow 'n u gotta jump ship to Millennium.
Ur really there to stuff ur face w/ schnapps & salmon heuer d'oeuvres.
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2/ 7AM Portfolio Review
U'll typically have ~250 names in the portfolio "universe" (stocks w/ active positions & those on watchlist but already modeled).
Review each thesis vis-a-vis new market conditions. Anything changed?
Should u downside/upsize any?
New trade opportunities?
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End/
Hope it's clear what's going on now!
Tons of background I didn't cover here on how banks work in general, 1st/2nd degree effects when interest rates rise & fall ...
If u want to read a BANKS PRIMER next, pls 🙋♀️support by retweeting this thread 🙏:
🏦📉 SVB Crash Explained📉🏦
Silicon Valley Bank—
#16
largest US bank with $212B — just crashed 60% in 1 day & fell 22% post-close. Stock halted now.
@BillAckman
is calling a US gov bailout.
@peterthiel
is calling a bank run.
JPM, BAC, WFC all dropped 6%.
What's next?
Is this
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🥷 Carl Icahn’s Alpha 🥷
"Corporate raider" Carl Icahn is the
#1
most feared investor on Wall St.
Averaging 31% annualized returns since 1968, he's turned every original $1 into $1.6M today!
How did he do it?
Here’s a playbook of the icon Icahn’s top trading strategies.👇
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8/ Then on July 19, 2021, China's Guangfa Bank (one of Evergrande's biggest lenders) ordered a freeze on 132M RMB in deposits.
Two more banks (Hang Seng Bank & Bank of East Asia) then suspended new mortgages for Evergrande’s 2 new projects in HK.
The house of cards was falling.
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Useful tip:
If this is your 1st time ramping up on the company, read the business overview section whole.
If not, use a tool like FileMerge/opendiff to quickly find what’s changed since last year (hopefully, not much).
If you can't bash but got $20K to drop, get a Bloomberg.
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🕙 24/7 Options🕙
Restricting trading between 9:30-4pm M-F is pure stupidity. It's market discrimination.
24/7 is the future
And our fastest way to get there is via crypto derivatives: on-chain markets for tokenized US equities and options.
🧵on OPTIONS MARKET-MAKING ON-CHAIN
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If this lack of education continues, retail investors will continue to overpay to predatory market makers.
Original SEC proposal here:
Spread the knowledge & retweet this thread to push securities regulation forward!
Exposé on the Dark Side of Market Structure
3 wks ago the SEC proposed a groundbreaking reform that could cut trading costs by >50%.
HUGE SHIT.
How did investors react?
Crickets🦗
Turns out <1% understood what's happening: how "market structure" works today.
Story time
👇
🧵
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7/ By 2020, Evergrande had erased 75% of all operating income (EBIT) compared to 2018. EBIT in 2020 was only 95B ¥ compared to 355B ¥ just 2 years prior.
Furthermore, gross margins had also dropped >10% from 36% in 2018 to 24% in 2020.
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9/ When are Evergrande's current debt obligations due?
According to the schedule below, a significant chunk (335B) is due end of 2021 & another (166B) end of 2022 -- exact dates not specified.
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You can make it rain & be an options expert while keeping the chart of different options configurations pulled up on one monitor (see below).
All options trades no matter how fancy (🦋s, condors) boil down to just:
- 2 base components (call, put)
- 2 base actions (buy, sell)
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Is CS doomed like Lehman?
TLDR: no
Here's the biggest reason why:
CS CET1 ratio is currently 13.1% (much above the 9.6% regulatory min).
Common Equity Tier 1 (CET1) compares a bank's liquid capital (cash + stock) vs. assets, i.e. an indicator of ability to avoid default.
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3/ 8AM Plan out your daily/weekly agenda
Major types of events that'll populate ur calendar:
- Investor day at XYZ
- Q1-Q4 earnings call
- XYZ road show
- Dinner event w/ IR (investor relations) at XYZ
- Private buy-side bus trip (w/ mgmt @ XYZ) arranged by GS
- JPM conference
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yeah sex is great but have you ever been pegged?
- RIP UST
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🎶Trader Jargon 101: How to Talk Like a Real Trader🎶
Learning the lingo was the
#1
biggest hurdle that I experienced on the trading floor.
When u read fintwit posts from the pros, does it all sound like voodoo? 😫🙈Don't worry.
Here's 20 top terms to get you sounding smart.
👇
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