can someone smarter than me explain how the big pod shop model (Millennium, Citadel etc.) generally works pretty well? The whole idea of yanking the portfolio after some non-outlier drawdown in a relatively short period of time shouldn't really add any value imo
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5. Depending on how smart/centralised you are you can try to juice your returns by hedging common risk (eg equity factors) and applying leverage, afaik Citadel does this aggressively, Millennium bit so much
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6. You are taking netting risk because you need to pay the winners but can’t claw back from the losers. This requires you to keep drawdowns small, and there are some other ways to mitigate it for example by passing on larger execution and financing fees to the pods
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