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Where It All Began: The Evolution of Franchising

TASA ID: 11532

There are references in American history to early business relationships which, while possibly not meeting the current FTC definition, were without a doubt, franchise/licensing relationships. These relationships existed in the selling of wares from town-to-town by peddlers, licenses granted for general stores at military outposts, and certain livestock sales and other goods in which exclusive territorial rights were granted to the "franchisees" by the holder of the rights. Unfortunately, while the relationships are mentioned in the literature, the names of these early franchise founders and the structure of the business arrangement are not. 

Throughout its long history, there have been four constants that have fueled the growth of franchising, the desire to expand, the lack of expansion capital, the need to overcome distance, and managing people from a distant location.

The use of franchising can be traced to the expansion of the church and as an early method of central government control, probably as far back as the Middle Ages. Some have written that it may indeed date back as far as the Roman Empire or earlier and given the necessity of large territorial controls, coupled with the lack of modern transportation and communication at the time, there is reasonable basis for this assumption.


Gamma Scalping 102 – The Undisclosed Risks

TASA ID: 13992

This article was originally published on NavesinkInternational.com and in Albourne Village, village-us.albourne.com. 

 

OptionSellers, LJM, Catalyst are among the prominent fund managers currently facing litigation for large losses due to short gamma positions. Retail investors regularly lose their savings by shorting options as well. It is time to explain a few things about the short gamma and the “gamma scalping” strategies.

This article is split in two parts for convenience. The first part, Gamma Scalping 101 – Gamma/Theta Trading, explained:

  • How the daily P&L of a portfolio of derivatives can be expressed with a simple parabola.
  • The concept of break-even, and when gamma brings more value than theta.
  • How historical and implied volatilities explain the gamma scalper’s long-term P&L.
  • How this trader can improve his odds by trading options of high implied volatility.

This second article explains some of the un-stated risks associated with the gamma scalping strategy.

Gamma Scalping 101 – Gamma/Theta Trading

TASA ID: 13992

This article was originally published on NavesinkInternational.com and in Albourne Village, village-us.albourne.com. 

OptionSellers, LJM, Catalyst are among the prominent fund managers currently facing litigation for large losses due to short gamma positions. Retail investors regularly lose their savings by shorting options as well. It is time to explain a few things about the short gamma and the “gamma scalping” strategies.

This article is split in two parts for convenience:

  • Gamma Scalping 101 – Gamma/Theta Trading, is this article. It explains the concept of gamma and theta, the daily P&L of an option market-maker, and the purpose of gamma scalping. It explains the difference of historical and implied volatilities, which are the long-term roots of profitability for the strategy, as well as why and how gamma-scalpers select the options to trade.

  • Gamma Scalping 102 – The undisclosed risks, will explain the not-so-obvious risks associated with the gamma-theta strategy: large losses and how frequent they are, the impacts of the gamma distribution and of volatility increases during large moves, the importance of institutional infrastructure, before concluding on its dangers.

Of Slopes and Flops – Navesink International

TASA ID: 13992

This article was originally published on NavesinkInternational.com and in Albourne Village, village-us.albourne.com

Portfolio modeling and information selection

Any investment decision should be grounded in solid market or economic information, not in the investor’s last emotion. This is true no matter which investment segment the portfolio manager is in:
  • In global macro / asset allocation, CIOs use econometric information (GDP, growth, balances, unemployment, PPP…), as well as market information (FX rates, interest curves, index PE...) to decide their asset class allocation.
  • In discretionary equities, portfolio managers ground their analysis in corporate fundamental information (cash-flow models, ratios, balance sheet metrics and their growths), more qualitative information (business strategy, management quality, relative positioning, provider and client data, new products) and many types of market & economic information.
  • Statistical arbitragers use technical information (momentum, acceleration, volatility, oscillators…), fundamental information (ratios, cash-flows, balance sheet statements...) and pretty much any data source they can put their hands on.

To read more, download the pdf below. 

The Importance of Sound Banking Procedures and Reviews by Multiple Sets of Eyes

TASA ID: 2717

The internet is full of landmines and scams. In this situation, a hacker obtained the email of the O’Neill Bragg president and sent an email to the VP in charge of banking to wire $580,000 to the Bank of China.  The VP didn’t question the email and completed the required wire transfer procedures for Bank Of America (BOA), O’Neill Bragg’s bank.  The Bank wired the funds thereafter.
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