Strategies · Library · Cash
§17.5Carry
Pawnbroking
Make a secured cash loan against an item such as jewellery or electronics, at a fraction of its appraised value. If not repaid, keep or sell the item.
- Asset class
- Cash
- Held for
- Weeks
- Data
- Needs data ARCANE lacks
- Symphony
- Cannot be built as a symphony
The rule
- Signal
- Appraised value of the collateral against loan size
- Entry and exit
- Lend; collect with interest or seize the collateral
- Sizing
- Loan is a fraction of item value
How it fails
- Collateral worth less
- Borrower defaults
- Licensing rules
Data it needs
- appraisals of collateral
No such data.
How ARCANE uses it
Not tradable by ARCANE. Paper only.
Not a market strategy.
Filed under the carry card
Own what pays more than it costs to finance (the return if prices stand still) and sell what pays less, across currencies, bonds, commodities and stock indexes.
A paper plan from this card holds 21 to 252 days, stops at 2× the expected move and uses at most 75% of your risk budget. The card
Source: Kakushadze and Serur (2018), 151 Trading Strategies, §17.5, p. 115 of the SSRN version. Described in our words. Carry is ARCANE’s filing, not the book’s.