The main (only?) reason that I haven’t tried to do this yet is leverage. Even ignoring broker fees, being stuck in fiat, and the time to build an automated system, Signals staking on 2xCORR3xMMC is effectively “trading” with ~4X+ leverage without the possibility of ever losing more than your initial. This is hard to replicate when generally you can only go 2X buying on margin. The best equivalent would be maybe buying options one month out (for the 20d target), but that adds another layer of volatility and complexity that has to be dealt with. Trying this out manually with the top and bottom 5-10 signals for a few weeks, I’ve quickly run into issues with many of the tickers with the strongest signals being so low-volume that options trading just isn’t reasonable. I can also foresee that with an automated system set up I might be tempted to interfere with it manually at times, which isn’t possible once a stake is locked in and would most likely have negative results.
4 Likes