Confused on rumor on length of trades in a Sector Pod at MM
I heard from a finance professor talking to a Director of Research at a MM hedge fund that the average length of a trade at a long/short portfolio pod is only around 3 days.
Out out curiosity why is the length so short ?
1-3 days is almost certainly too short, unless you are trading around a specific catalyst. There’s an excellent write up by Bayesian Bets describing his philosophy as an MM PM (thread is called SM —> MM transition). Although every PM/analyst has a different process/philosophy, his explanation seems to fit into my experience.
average book turnover is 10-20x a year, so 13-26 days (260 trading days/year) feels like average
maybe if you remove the core positions (held 6 months+) the "opportunistic" trades could be shorter like 5-10 days
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