Brain Teasers o You have 8 red and

Brain Teasers o You have 8 red and 16 blue socks. There’s no light in your room, so you have to choose your socks in the dark. What’s the minimum # of socks you need to choose to ensure you have at least a matching pair.

Answer o Three n Two socks can be different, but a third must match one of the first two

Announcements o Upcoming Presentations: n Economist Stephen Roach on Thu 12: 30 n Derivatives o Upgrade Capital Trading Competition n www. upgradecapital. com/signup/

Market Update: The Macro View 4

Quantitative Finance Society Anatomy of a Trade 5

Anatomy of a Trade o Trade Thesis o Trade Execution o Managing Risks o Exiting a Trade 6

Trade Thesis o Bottom-Up vs. Top-Down o News o Catalyst o Time Horizon 7

Trade Execution o Pick the right instrument or asset class to express your view o Isolate your trade thesis n Long n Relative Value n Hedging 8

Trade Execution o Picking an optimal entry time n Technical analysis o Understanding price and volume o Momentum vs. mean reversion n Understanding your catalyst o Upcoming news o Efficient markets 9

Managing Risks o Trade Order Types n Market Order, Limit Order, Stop Order n Stop-Loss Order o Risks Affecting your Trade Thesis n Market Risk, Interest Rate Risk, Credit Risk n Political Risk, Currency Risk n Idiosyncratic Risk 10

Exiting a Trade o Watch your thesis and catalyst o Capture profits o Technical analysis o Discipline: stick to your thesis 11

Questions? 12