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CAPS / Lessons from CAPS


Subject:  Re: Long CAPS 5 Short CAPS 1 Date:  12/2/2009  2:17 PM
Author:  Padavona Number:  160 of 188

Has anybody tried going long on CAPS 5's and short on CAPS 1's.

Not specifically. However I hedge invest constantly, as I really like the stable returns it produces. My goal is always to be market neutral.

One trade I have run for several months has been Long SPY, Short IAT. This is not a recommendation...I've had a winning 6 percentage point spread on it, but I need to determine if it is still a keeper.

I would need a lot more information on the historical performance of Cap selections per rating, to confidently use it as a base for a hedge strategy. Even if I had strong evidence the community could produce out-sized returns, I will still only use it as a screen rather than a mechanical strategy.
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