Typically excellent piece from @dsquareddigest The exponential insight is especially neat. Think of it a little like fishing...today you can’t export oysters to the EU (because you simply aren’t allowed to), tomorrow you don’t have a fish exporting business (to the EU).

The extremely small minority of people who known anything about this who think that Brexit will be good for the City make a number of arguments which I shall address in turn...
1. They need us more than we need them. This is a variant of the German carmakers argument. And we know how that went...Business will follow the profit opportunity and if that has moved then so will the business...
And what do we mean by us / we. We’re not talking about massed ranks of Euro investing / trading etc blue blooded British institutions.
Au contraire. We’re talking about the London based subs of US, Asian and indeed European capital markets players...As soon as they think the profit opportunity has moved then so will they...it’s a market innit...
2. The Europeans will never act in a way that might be economically sub optimal.

I refer you to Brexit. But kidding aside, the balance between economic optimality and, to coin a phrase, taking back control is not at all straightforward.
I bet a bazillion notional shillings that many people might consider the benefits of taking back control over a vital national function far far far outweigh an additional economic cost.

I refer you to the financial crisis.
3. But but THE EU IS GOING TO FALL APART IT’S ONLY A MATTER OF TIME

Good luck with that.
4. But the U.K. is a speedy fast turning speedboat and the EU is a ponderous sea tanker of weighty regulations.

🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣
The U.K. regulators are extremely tough. Arguably tougher than the EU. I refer you to ring fencing. Or the U.K. conduct regime (very scary). The idea that any of this is going to be materially relaxed is for the birds.
5. Freed from the dead hand of Europe, we shall exploit all sorts of wonderful new opportunities.

Well. Maybe. London has a v substantial scale / incumbency advantage. But ofc (as Dan points out) that does not mean that those new opportunities will necessarily arise in London.
The bottom line is that London ain’t going anywhere any time soon as a leading financial services capital.

BUT. There is no way round the fact that Brexit has impaired London’s competitive position. This is an apple falling, water flowing downhill point.

It’s not a debate.
Over time, the damage will range from significant to really quite bad. The possibility of the latter depends on the EU getting its act together re CMU...if it does (debatable) then watch out...

/ends

More from Yet Another Columnist

I tend to agree with this - of course many things can still go wrong...but (certainly on the UK side) as the list of outstanding issues decreases and as the cost of no deal becomes more apparent deal momentum will increase.


I find it most amusing that people invest so much value in public statements, briefings, tabloid headlines, the tweets of obscure backbenchers etc. Cherchez les fundamentals!

There is a deep vein of analytical pessimism in one particular direction, which, whether correct or not, is noteworthy. On the one hand, a firm belief in the fundamentals - gravity exists - but on the other hand those fundamentals are not meaningful to the final decision.

But gravity does exist! Whether one likes it or not. We do not have wings. Or feathers. And the realisation of the fundamentals will impact the political calculation (though timing differences may apply).

You don’t have to invest any particular optimism or see any virtue in the principal players to make this point.

More from Government

Long thread: Because I couldn’t find anything comprehensive, I’m just going to post everything I’ve seen in the news/Twitter about Trump’s activities related to the Jan 6th insurrection. I think the timing & context of his actions/inactions will matter a lot for a senate trial.

12/12: The earlier DC protest over the electoral college vote during clearly inspired Jan 6th. On Dec 12th, he tweeted: “Wow! Thousands of people forming in Washington (D.C.) for Stop the Steal. Didn’t know about this, but I’ll be seeing them! #MAGA.”


12/19: Trump announces the Jan. 6th event by tweeting, “Big protest in D.C. on January 6th. Be there, will be wild!” Immediately, insurrectionists begin to discuss the “Wild Protest.” Just 2 days later, this UK political analyst predicts the violence


12/26-27: Trump announces his participation on Twitter. On Dec. 29, the FBI sends out a nationwide bulletin warning legislatures about attacks https://t.co/Lgl4yk5aO1


1/1: Trump tweets the time of his protest. Then he retweets “The calvary is coming” on Jan. 6!” Sounds like a war? About this time, the FBI begins visiting right wing extremists to tell them not to go--does the FBI tell the president? https://t.co/3OxnB2AHdr

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A THREAD ON @SarangSood

Decoded his way of analysis/logics for everyone to easily understand.

Have covered:
1. Analysis of volatility, how to foresee/signs.
2. Workbook
3. When to sell options
4. Diff category of days
5. How movement of option prices tell us what will happen

1. Keeps following volatility super closely.

Makes 7-8 different strategies to give him a sense of what's going on.

Whichever gives highest profit he trades in.


2. Theta falls when market moves.
Falls where market is headed towards not on our original position.


3. If you're an options seller then sell only when volatility is dropping, there is a high probability of you making the right trade and getting profit as a result

He believes in a market operator, if market mover sells volatility Sarang Sir joins him.


4. Theta decay vs Fall in vega

Sell when Vega is falling rather than for theta decay. You won't be trapped and higher probability of making profit.