Archive for May, 2010

The Royal Road

May 19, 2010

Being well into my late forties, I can now confidently state:  There is a royal road to mathematics.  Finding it, however, can take a lifetime.


More on returns from short selling

May 18, 2010


Thanks for the illuminating conversation about short selling.  What you explained was that the primebroker, in this case, wasn’t requiring an explicit margin to be posted on short sales, because the primebroker was permitting a degree of leverage in these operations.  The entire equity of the fund was behind this decision of the primebroker to not post explicit margin requirements.

But that still doesn’t quite solve the problem of the return on a particular short sale.  How do I measure this intangible “degree of confidence” that my primebroker has in me?