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3/12/19: Portfolio Analysis - Illiquid Pricing

From Theory To Practice

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In today’s portfolio analysis, we see a great example of how illiquidity causes difficulties in finding the fair price of a strategy. Specifically, with CMG up today, our Long Call Spread was actually DOWN earlier in the day. This is completely counter to what we would expect, and when we investigate the situation a bit more, we see that this clearly a product of an illiquid underlying.

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