Hedge Maker has been on auto-pilot test in managing equity portfolios in a sandbox for a few weeks. Demonstrated in the following, Hedge Maker outperforms the market.

End of Day 2011/06/30 using Large Portfolios

End of Day 2011/06/29 using Large Portfolios

Start of Day 2011/06/27 using Large Portfolios

End of Day 2011/06/27 using Large Portfolios

Please note the difference in the percent column above.

Most of the portfolios have been trading for only a day.

Further note the percent market gain of the ones in green. Consider this compared to what the stock market normally averages for gains.

Compare the following charts: NAS Industry Index, and the other, Hedge Maker’s performance for its respective positions held. ( Charts are added weekly)

NASDAQ Industry Index 06/07/2011

Hedge Maker managed NASDAQ INDU Portfolio Performance 06/07/2011

I believe Hedge Maker’s performance in a downed economy is self evident when managing equity portfolios.

Hedge Maker’s NASDAQ Industry Portfolio Members

Continued History

NASDAQ Industry Index 06/16/2011

Hedge Maker managed NASDAQ INDU Portfolio Performance 06/16/2011

NASDAQ Industry Index 06/17/2011

Hedge Maker managed NASDAQ INDU Portfolio Performance 06/17/2011

Equity Derivatives
Adding options and the Greeks is also a logical step forward like in the case of Goog in the third snapshot.

My business interest is:

A- To parallel test in my sand box, and later yours, against positions for demonstrating its worth.

Please send me a list of ( 20 ) twenty stocks for a Hedge Maker Portfolio, assuming a volume of 300-400 shares each, and I will show you my results in (20) twenty business days pro-bono.

B- To lease Hedge Maker based on monthly profits.

Based on profits only, I would like to be paid what you feel its worth to you!

Upon your inquiry, I would also like to send the white paper under NDA for your review.

Sincerely Yours,

Orion K. Daley

Trade System-I Stock Traders Work Station

Click for Orion Daley’s Resume

Trade System-I is a Java Swing Implementation of a Traders Work Station. It has a number of market selections for its domain focus. Equities and Stocks as illustrated above is one of them. Within each domain , like Equities and Stocks, critical areas of focus can be selected by the tabs.

The Equities and Stocks domain contains Market / Company News, Stock Quotes, Watch List and Charting, Risk Analytics, and a Portfolio Manager, which is into openFIX for post trades.

Click for Orion Daley’s Resume

Click for Orion Daley’s Resume

Trade System-I Fix Income Traders Work Station

The Fixed Income Work Station is written in Java Swing. It is for the purpose of supporting Asset Management. It takes advantage of its own Quant Library, the ability to obtain data and news off the internet, such as the Federal Reserve Interest Rates, and do such rudimentary things such as charting the Yield Curve, or Fed Interest Rates.

Click for Orion Daley’s Resume

Click for Orion Daley’s Resume

Click for Orion Daley’s Resume

To support asset management, the access to remote data, and its custom quant library, allows its design and build to be dynamic. In other words, different areas of Fixed Income can be supported that range from Trading, Portfolio Valuation, Inventory management, risk analytics and research.

Click for Orion Daley’s Resume

Mitigating Investment Risks in Institutional Lending and REPO

by Orion Karl Daley. okdaley (at) gmail.com

Please see the attached three minute slide show. Your learned opinion is welcomed as well as sharing this.

Summary:

New types of Default Swap Contracts are proposed that are intended to mitigate risk in institutional asset management. They are to consist of insurance policies that by design will not impact an insurers reserves.

The slide show is intended to be self explanatory and I am not from a bank of insurance company. My interest is from the standpoint as an engineer.

The idea in summary is that for any institutional lending contract ( Sec Lending or REPO ) , the lending institution can obtain an insurance policy from an insurer.

The original intent of the swaps is 1- to allow lender risk mitigation while opening the markets further: i.e – increase lending at the institutional level. And 2- to further a revenue stream for insurer’s in writing such policies.

When an insured lending contract is in default, while the insurer pays on the policy, the lending institution provides a long term loan to them for the same amount.

The loan is to remove the exposure to the insurer’s reserves, while enabling them to meet their commitments of the insurance policy.

Other assumed benefits:

From the lenders standpoint, the loans noted to an AA rated insurer are an AA rated asset.

- the accumulation of AA rated assets ( loans from the bank ) offers the opportunity to create ‘AA’ rated CDOs.

About The M3 Money Supply Space and trickle down

Although the Fed sees M3 as opaque ( turning a blind eye, in a state of denial, or like sticking your head in the sand ) , this is the space that institutional lending could find itself in.

With effective risk mitigation and ‘AA’ rated assets, I would think that the M3 Space could be stabilized, where if not, it would affect M2 and M1: i.e – the recent implosion.

I further assume that as M3 is stabilized, this would improve the lending capacities in M2 and M1: i.e – as toxic assets become offset by ‘AA’ rated ones on balance sheets.

The Group Trade Manager is written in C++ (Microsoft Visual C++/MFC ). Its initial business purpose is providing %percent allocation for a money manager’s sub-accounts. It provides real time trading and reporting.

Percent allocation of FX lots is typically a manual task, where the group trade manager makes this an automatic operation.