1. We put on our largest single ticket trade today by purchasing 812 $LUNA ($75.5k) and staking it in the Terra ecosystem. After several weeks of discussions with leading professionals in the DeFi space, we have high conviction in this.
2. This is in addition to the 8 ETH of $bLUNA that we acquired at $54 and $72 (now $92), which we already have as collateral for UST deposits and are utilising the slow burn process. Credits to our podcast guest @shivsakhuja for the graphic
3. We added a higher risk strategy by purchasing worth of $HND at an average price of $2.50. Already +57.6%. We put this on because a) we already have stables on hundred.finance and b) we spoke to a number of people v close to the protocol about their plans.
4. We have received an airdrop of 1500 $NEWO for contributing to the NEWO/USDC LP on @SushiSwap. In fact, I just got off a call with 2 of the founders who were instrumental in the launch of $BTRFLY and they will also be coming on the podcast v. soon. Looking forward to seeding.
5. Overall portfolio balance has is healthy (see low/medium/high). $920k/240E. +289% since our first $ETH distribution of 40E on 26/12/2021 (8 days).
Tune into the Twitter Spaces tonight to hear from me and the rest of the team, and to learn more about our GROWTH plans.
Here's a statistical approach for thinking about pair trading ✍️
This framework might help you no matter what your strategy is.
Let's take a deeper look at $ARB / $LDO, and how you might profit from this...
There are 2 ways of pair trading:
1) Narrative based 2) Statistical Arbitrage
Most trades on Pear Protocol are narrative trades i.e. you build a story why Asset A will outperform Asset B (in any market condition) and enter a long/short pos.
Here we'll focus on 2) Stat-Arb
Q1 - "Is there a statistical relationship between these two assets?"
Usually we jump to correlation for this (see below image lol).
More important than correlation, is this relationship between $ARB and $LDO constant over time? AND does it mean revert when it deviates away?
1. If you, as a retail buyer want to buy $IBTC (the iShares spot bitcoin ETF), then you'd go to your broker/online platform and swap your $ for shares in the ETF. The broker would go and buy the shares on the exchange (Nasdaq) on your behalf. Easy.
2. This is what we call the 'secondary' market. The shares already exist, and you can buy them at the market price. But what if there are no ETF shares available in the secondary market?
People don't really understand what Blackrock is, or what they do.
So let's go inside...
But first a little about their founder and CEO Larry Fink, since it will be important later
Larry joined Wall St in 1976. He was smart and made money. He pioneered the idea of debt securitization (packaging up different loans as bonds). He then ran the trading desk for those Mortgage Backed Securities (MBS). Yes, those bonds that led to the 2008 GFC 🤯