A market-maker friend told me this morning that he knows a fund PM who opened a more-than-200x long position around BTC 79,300 last night, with the position size being 40% of his fund. Guess what happened? It didn’t blow up.
This isn’t a money problem—it’s a behavior problem. A PM who manages other people’s money opened a 200x trade at a point where, in the 4-hour percentile, it’s 51%, and the long/short liquidation ratio at the 24h level is 2.3:1. The mathematical expectation is no different from taking the fund money to Macau to gamble on big and small. I asked him what this person was thinking, and he said, “Last year his small fund was in the top 3 for returns, but this year the pressure of rankings is high.”
What’s the wildest leverage position you’ve ever seen? Tell me so I can broaden my horizons—and take the chance to reflect on where your own discipline is when you manage money.
This isn’t a money problem—it’s a behavior problem. A PM who manages other people’s money opened a 200x trade at a point where, in the 4-hour percentile, it’s 51%, and the long/short liquidation ratio at the 24h level is 2.3:1. The mathematical expectation is no different from taking the fund money to Macau to gamble on big and small. I asked him what this person was thinking, and he said, “Last year his small fund was in the top 3 for returns, but this year the pressure of rankings is high.”
What’s the wildest leverage position you’ve ever seen? Tell me so I can broaden my horizons—and take the chance to reflect on where your own discipline is when you manage money.