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What usually happens when the guys making markets hedge the at-risk positions they must take to fill big block orders in Amazon (NASDAQ:AMZN), like they are now, on 11/2/12?

  1. In the next 3 months, the stock's price may close higher than today's 73% of the time.
  2. That higher price, day by day, has averaged +12.2%. The lower prices average -5.0%
  3. Market-makers are protecting against loss for prices as high as $255.99 (+10.1%)
  4. Market-makers are protecting against loss for prices as low as $224.36 (-3.5%)
  5. Maximum drawdowns from today's price in the next 2 months have averaged -6%
  6. In the next 2 months, buys like at today's forecast reached their high price 79% of the time
  7. The average gain when that happened was +13.9%.
  8. When not reached, closeouts after 2 months changed the average gain to +6.9%.
  9. It took an average of 29 days for all such closeouts, an annual rate of gain of +77%
  10. In the next 5 years that may happen 150 times again
  11. In the past 5 years this stock's average annual rate of gain has been +30%
  12. In any one year's time its maximum drawdown has been -57%

What usually happens when the guys making markets hedge the at-risk positions they must take to fill big block orders in Apple (NASDAQ:AAPL), like they are now, on 11/2/12?

  1. In the next 3 months, the stock's price may close higher than today's 73% of the time.
  2. That higher price, day by day, has averaged +10.8%. The lower prices average -4.7%
  3. Market-makers are protecting against loss for prices as high as $680.15 (+17.9%)
  4. Market-makers are protecting against loss for prices as low as $569.56 (-1.3%)
  5. Maximum drawdowns from today's price in the next 2 months have averaged -0%
  6. In the next 2 months, buys like at today's forecast reached their high price 100% of the time
  7. The average gain when that happened was +13.6%.
  8. When not reached, closeouts after 2 months changed the average gain to +13.6%.
  9. It took an average of 17 days for all such closeouts, an annual rate of gain of +568%
  10. In the next 5 years that may happen 1 times again
  11. In the past 5 years this stock's average annual rate of gain has been +39%
  12. In any one year's time its maximum drawdown has been -57%

These expectations have been drawn from our current actuarial histories of the two stocks and are provided for your information. They are not to be construed as recommendations for or against investment, nor solicitations for any such actions.

We wish merely to provide possibly useful comparative information for those interested in the stocks and their future activity, as viewed by well-informed, highly-motivated, active, at-risk investment professionals.

Past results are no guarantee of future actions. But odds-players often have more satisfying results than those ignorant of key elements of their surroundings.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: What Happens When Market-Makers Forecast Prices For Amazon Vs. Apple