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Competition Analysis | Who jumped onto the leaderboard of US stocks Papertading Competition?

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Moomoo AU wrote a column · Sep 9 21:56
G'day mooers!
Hope you survive from the falling-last-week and enjoy your journey in Papertrading Competition Season 3. We found a lot of gainers killing the rank even through the declining US stock market.
To utilize these extraordinary mooers by their trading strategies, here we output the Competition Analysis column, to boost the atmosphere of competition!
Competition Analysis | Who jumped onto the leaderboard of US stocks Papertading Competition?
Strategy 01: Profiting from market volatility with options
Looking at the trades of the top three traders in terms of returns last week, all three traders more or less benefited from correctly betting on the short-term trends of indices or star tech stocks such as $NVIDIA (NVDA.US)$ and $Tesla (TSLA.US)$.
For example, the top-ranking trader @151764737 profited by purchasing puts on Nvidia with a strike price of $100 expiring on September 6th, then selling to close positions on September 3rd and 4th to profit.
Very similarly, the second-ranked trader @151742087 also purchased puts on Nvidia with a strike price of $105 expiring on September 6th, but unlike the first trader, this trader did not choose to close positions early but exercised the options after expiration.
Ultimately, the decision to close positions early or wait for expiration depends on the investor's risk tolerance, market expectations, and personal trading strategy. Closing positions allows investors to flexibly adjust their positions according to changes in market conditions without waiting for the contract to expire.
Early closing can avoid the uncertainty caused by market volatility on the expiration date; if the market price moves unfavorably to the investor's position, they can choose to close early to limit losses; similarly, if the market price moves in a favorable direction, they can choose to lock in profits early.
However, if the market continues to move in a direction favorable to the investor, closing early may result in missing further gains. For investors with a clear expiration strategy, waiting for expiration ensures the complete execution of the set trading plan. It reduces the need for frequent trading, which in turn reduces transaction costs.
However, as the expiration date approaches, the value of options is more affected by time decay, increasing uncertainty.
Strategy 02: Short-term trading using event-driven opportunities
The third-ranked trader @151705509 is a fan of high-frequency trading, and this investor completed over 160 trades last week, involving more than a dozen stocks. This trader is very good at capturing short-term stock price fluctuations, with positions rarely held for more than one day.
High-frequency short-term trading using event-driven opportunities relies on the ability to capture market reactions after specific events occur quickly. This type of investment style often focuses on stocks that have had significant events recently, such as earnings releases, or stocks with very high volatility and significant price movements, such as $BloomZ (BLMZ.US)$, which rose by 119% on September 6th after the company disclosed a business alliance with CrossVision Inc., a Japanese digital entertainment company specializing in Web 3.0 technology. The investors made multiple trades on that day and profited handsomely.
Investors can find stocks with abnormal price fluctuations in the featured lists feature of the moomoo app. Frequent trading provides immediate feedback on results, which can help investors quickly assess the effectiveness of their strategies and make adjustments.
Competition Analysis | Who jumped onto the leaderboard of US stocks Papertading Competition?
❗However, it should be noted that frequent trading requires investors to closely monitor market dynamics, necessitating a significant amount of time and effort to track the market, analyze information, and execute trades, which can be a considerable burden for individual investors. It also means more buy-and-sell operations, each of which generates costs that can accumulate and erode profits.
Overall, using event-driven frequent trading presents both opportunities and challenges for individual investors, with the key being how to balance risk and oppotunities, and ensuring they have sufficient knowledge and tools to cope with market changes.
We'll keep updating the newest information and movements of Papertrading Competition. Stay tuned & comments below about what you would like to read next time.
   
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Competition Analysis | Who jumped onto the leaderboard of US stocks Papertading Competition?
Notes: This competition is only available for Australian users.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only. Read more
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