Book Image

Algorithmic Short Selling with Python

By : Laurent Bernut
Book Image

Algorithmic Short Selling with Python

By: Laurent Bernut

Overview of this book

If you are in the long/short business, learning how to sell short is not a choice. Short selling is the key to raising assets under management. This book will help you demystify and hone the short selling craft, providing Python source code to construct a robust long/short portfolio. It discusses fundamental and advanced trading concepts from the perspective of a veteran short seller. This book will take you on a journey from an idea (“buy bullish stocks, sell bearish ones”) to becoming part of the elite club of long/short hedge fund algorithmic traders. You’ll explore key concepts such as trading psychology, trading edge, regime definition, signal processing, position sizing, risk management, and asset allocation, one obstacle at a time. Along the way, you’ll will discover simple methods to consistently generate investment ideas, and consider variables that impact returns, volatility, and overall attractiveness of returns. By the end of this book, you’ll not only become familiar with some of the most sophisticated concepts in capital markets, but also have Python source code to construct a long/short product that investors are bound to find attractive.
Table of Contents (17 chapters)
14
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15
Index

The Stock Market Game

"Infinite games have infinite time horizons. And because there is no finish line, no practical end to the game, there is no such thing as "winning" an infinite game. In an infinite game, the objective is to keep playing, to perpetuate the game."

– Simon Sinek

The financial services industry is facing a severe existential crisis. The only things melting faster than the polar ice caps are assets under active management. Evolution does not take prisoners. If active managers do not want to go join the bluefin tuna on the list of endangered species, then maybe learning to sell short would be an invaluable skill to add to their arsenal. As the global financial crisis of 2007-2008 showed us, it's crucial for market participants to be capable of generating profits not only in bull but also in bear markets. To that end, this book will cover the ins and outs of short selling, and develop algorithmic strategies...