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
Other Books You May Enjoy
15
Index

Summary

Investing in a PMS is the highest return on investment decision you will ever make. Without one, you might get lucky a few times picking the right stocks here and there, but nothing compares to the disciplined consistency of a robust PMS. You will top up winners and deal with flesh wounds before gangrene sets in and limits performance. You will become a more disciplined market participant. Risk management is not part of the business. It is the business. Portfolio managers are not in the business of picking stocks. They are in the business of managing risk with the stocks they either picked or passed. Small benefits compound over time and set you apart from the competition who still run around believing stock picking is the key to success. When your portfolio management becomes your Iron Man suit, you will be competing against people who think they trade a system.

Short selling is risky. The market does not cooperate. Yet choosing not to learn to sell short is riskier....