2012 YE Review

It’s that time of year again and I’ll keep the structure similar to 2011:

Note – All numbers are after fees. Rather large commission fees I would add….

The Good:

– I ended the year in the green thanks mostly to a successful risk arb in NXY that hit in December.

– Volatility Trading was a bright spot in the book and despite some Draw Down during the summer euro crisis, the remainder of the year was excellent. I wrote more about the specifics of the performance here:

VolTrading 2012

– I received a capital bump for 2013 with a proposal for further capital dependent on Q1 performance. We will be moving into new offices as well shortly which should have some pretty nice perks.

The Bad:

– Although the year ended in the green, it was only marginal in that direction. Not only that, it all occurred at the end of the year and with a large amount of volatility.


– Numerous portfolio allocation decisions proved to be quite poor at certain periods of the year. It’s my goal in 2013 to do more of what works and less of what doesn’t.

The Ugly:

– While Risk Arbitrage and Volatility Trading were profitable, Statistical Arbitrage and Discretionary Stock picking delivered a negative return. In particular, TSO – VLO spread, JAKK tender offer, and some other “special situations” that didn’t work out contributed to the losses. As any good trader has done, I’ve thoroughly gone through the losses and it basically boiled down to position sizing. Losses are a part of the business but these represented large outlier losses.


~ by largecaptrader on January 1, 2013.

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