What do you think about this new fund's strats (Three Stones)? Any insight into them?

Found their strats interesting. Anyone have any insight into this company as well? Interested in getting to know them more.

"Three Stones will initially employ three trading strategies rarely seen among Asian hedge funds, according to the people. Capital structure arbitrage will allow it to take advantage of pricing discrepancies of different securities sold by the same companies. An option-based-trend-following strategy uses option theory to seek to profit from the trending behavior in equity markets, especially in Asia. Volatility trading will tap into swings in prices of securities as a result of imbalanced supply and demand or investor sentiment, said the people."


Comments (5)

Nov 17, 2015


Nov 18, 2015

Saw the same article, here is my take on the strats.

Strategy one - Possibly convertible arbitrage or more playing the spreads between common stocks and sub receipts issued by the same company

Strategy two - this one is pretty original in my encounters. Although it might be a fancy way to describe issuing puts on up trends or issuing calls on downtrends. I could be wrong on this one.

Strategy three - come on now... this is simple technical analysis trading (support and resistance, trend lines, moving average, break outs/mean reversion trades). AKA 90% of what retail traders do. Not judging, I do it too sometimes, also profitable. But "volatility trading",!?!?! They just had to put a fancy name on it.

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Nov 19, 2015

So overall, do you think that the strats are just run of the mill? Anything that actually shows promise?

Nov 19, 2015

The strategies all work. If anything, i think three stones will be a profitable fund.

I was just just getting a little smurky because the descriptions of the strategies make them sound almost exotic while, other than the option strategy, they are pretty traditional strats by north american standards.

Here is a good article on what works in asian markets.


Nov 20, 2015