Confusion: Can multiple traders profit by bringing the exact same information to market?
I want to say yes? At least if they don’t individually have enough heft to fully price it in? That would explain how multiple traders are able to exploit the same anomaly, whereas hedge funds have to cap their fund size because getting too big hurts them.
There’s a certain amount of money that can be made of an inefficiency in the market depending on the liquidity of the underlying market. There are a limited number of people who want to take the opposite site of the trade you are making.
Usually, you get dimishing returns as you bid people lower till the price is at it’s efficient level.
Confusion: Can multiple traders profit by bringing the exact same information to market?
I want to say yes? At least if they don’t individually have enough heft to fully price it in? That would explain how multiple traders are able to exploit the same anomaly, whereas hedge funds have to cap their fund size because getting too big hurts them.
There’s a certain amount of money that can be made of an inefficiency in the market depending on the liquidity of the underlying market. There are a limited number of people who want to take the opposite site of the trade you are making.
Usually, you get dimishing returns as you bid people lower till the price is at it’s efficient level.