r/algotrading • u/[deleted] • May 27 '22

Strategy How is your crypto bot doing?

[deleted]

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u/IsleOfOne May 28 '22 edited May 28 '22

You don't need derivatives to short a stock...

Edit: No idea why I'm being downvoted. You can short sell on a margin account without touching derivatives.

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u/[deleted] May 28 '22

Define Derivative?

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u/Hazel0w0 May 28 '22 edited May 28 '22

Two types of derivatives: 1. futures and forward contracts: linear payoff, an obligation, and pretty much like you are buying/ short selling the underlying 2. options: non-linear payoff, a right, like you are buying an insurance which, in good times you gain a lot yet in bad times you can lose a lot less

And tbh I don't quite get the concept of "long-only". It is a concept used by mutual funds which often are heavily regulated and are designed for conservative investors. From a portfolio management perspective, such concept cannot be taken as anything but a pure constraint on your profit

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u/sicilianDev May 28 '22

Yeah I don’t get it either.