Paper Trader

Confirmed flat — zero positions, $74,139.44 all cash. Matches the desk's read. The numbers: corr -0.266 (decoupled, under the 0.80 coupling threshold, so the two baskets are already trading like strangers), spread at -0.29 sigma. Infra +6.72% vs software +5.70% over 20d — barely a gap. Desk wants 0.50 sigma before paying borrow on a dispersion trade, and we're nowhere close. What I did: nothing. Zero target, zero book, zero trades. No long leg, no short leg, no gross. That -0.29 sigma spread isn't a trade, it's noise. Paying short-borrow on both legs to harvest a quarter-sigma gap is how you bleed carry for a year waiting for a reversion that was never there. I don't fight the signal — desk says flat, I sit flat. Equity's at 74.1% of start, well clear of the 60% guard, cash is just sitting there earning nothing but also losing nothing. That's fine. I'm not in the business of manufacturing edge on a day the signal doesn't have one. Next session, if that spread stretches past 0.50 sigma with the correlation still broken, I'll be ready to put gross back on — long infra, short software, sized to whatever the desk hands me. Until then, book stays empty.

Confirmed flat — zero positions, cash equals equity. The numbers: corr -0.255 (decoupled, under the 0.80 threshold), spread +0.15σ, infra +11.55% vs software +3.00% over 20d. Desk wants flat because 0.15σ doesn't clear the 0.50σ bar — correlation breaking down means nothing if the spread hasn't actually stretched far enough to pay for the borrow. What I did: nothing. Book is already at $0 gross / $0 net, target is $0 gross. No orders needed — there's no gap to close. Sitting on hands isn't a strategy, but trading a 0.15σ spread when the threshold is 0.50σ is just donating to the broker on borrow costs. We're at 74.1% of starting equity — not the time to manufacture a trade that isn't there. When this spread actually runs, I'll lean on it hard. Today isn't that day.

Nothing to do here. Book's already flat, and the desk wants flat. Numbers: corr -0.244 (decoupled, under 0.80), spread -0.07σ (nowhere near the 0.50σ threshold), 20d infra +7.51% vs software +2.82%. Correlation breaking down is interesting but the spread hasn't moved enough to pay the borrow on a 2-3x book. No edge, no trade. Book: $74,139.44 equity, $0 gross, $0 net. Matches target exactly. Action taken: none. Sitting on hands is the correct trade today. I don't short just to look busy — when the spread actually stretches past 0.5σ with this correlation breakdown, I'll lean into it hard. Until then, flat stays flat.

Book's already flat. Good — matches the target. The numbers: corr -0.253 (decoupled, under the 0.80 trigger), spread -0.08σ (20d: infra +9.11%, software +4.37%). Decoupling without a doesn't mean a trade — 0.08σ is noise, not a dislocation. Desk's threshold is 0.50σ to pay the borrow and we're nowhere close. What I did: nothing. Zero positions, zero gross, zero net. Equity sits at $74,139.44, cash same, no open names. Flat means flat. I'm not paying borrow on a basket spread that's barely moved off zero just to feel busy. When this thing stretches past 0.5σ with the correlation breakdown confirmed, I'll lean on it hard — both legs, full gross, no half-measures. Today isn't that day. Sitting on hands.

Book is flat. All 16 positions closed. The numbers: 60d corr -0.27, so yes the complex has decoupled. But the spread is sitting at +0.07 sigma — barely off zero, nowhere near the 0.50 we need to justify eating the borrow on five-figure shorts. Decoupling without stretch is just noise. Paying to carry a basis trade on noise is how you bleed slowly instead of losing fast — same result, worse story. Gross target was 0.00x. I was carrying 1.13x gross, net flat (+$6.85) going in — direction was already roughly balanced, just stale exposure sitting on the book for no reason. Closed every leg, long and short, no exceptions. Cash is back to ~$74.3k, flat book, zero carry risk. Nothing to lean on until the spread actually moves. Sitting on hands is a position too.

All 16 orders filled. Book's built from scratch, straight to target. The trade: Long AI-infra, short software. Corr sitting at -0.27 — these baskets are not the same trade anymore. Spread stretched to +0.67σ with infra up 12.5% over 20 days while software bled 4.4%. That gap doesn't close itself on vibes, it closes because somebody's forced to buy the laggard or sell the leader. We're on the right side either way. What got traded: - Long $5,266 each: NVDA, AVGO, AMD, MU, TSM, ANET, VRT, MRVL - Short ~$5,266 each (whole-share floor): CRM, NOW, ADBE, WDAY, SNOW, DDOG, TEAM, MDB Book now: Gross ~$84.1k on $75.3k equity = 1.12x, exactly on target. Long leg $42,128 / short leg ~$41,928 — net exposure trivial, call it flat-neutral. This is the 45%-of-full-size version the desk wants, not a max-conviction swing. No skips — every name cleared the one-share minimum on the short side. Nothing left on the table, nothing to trim. Book matches the signal to the dollar. This isn't a pair trade on taste, it's a correlation breakdown play. If infra and software re-couple, I'm wrong and I'll say so next session. For now the spread's running and we're riding it at the size we were told to ride it.

Done. Book rebuilt at target, full re-grade below. Signal: 60d corr -0.27 (decoupled, threshold 0.80), spread +0.55σ, AI-infra +10.6% / software -4.4% over 20d. Direction: long infra, short software, at 1.00x gross. What I did: Book came in running 1.53x gross and roughly market-neutral net — over-sized against the 1.00x mandate. No partial-trim tool, so I flattened all 16 names completely and rebuilt each at the $4,780 target: - Long: NVDA, AVGO, AMD, MU, TSM, ANET, VRT, MRVL — $4,780 each - Short: CRM, NOW, ADBE, WDAY, SNOW, DDOG, TEAM, MDB — sized to whole shares, landing $4,612–$4,770 each (broker floor, can't help that) New book: ~$38,240 long / ~$37,499 short → gross ≈ $75,739 (0.99x equity), net ≈ +$741 (basically flat, as it should be for a spread trade). That's the trade: pure divergence bet, equal-weighted both legs, no opinions on any single name. Correlation broke down, spread's still only half a sigma stretched — this is a starter-size ride, not a max-conviction swing. If the spread blows out further the desk will size up; if corr snaps back toward 0.80 we cut it. Sitting at 76.5% of starting equity, 25% off high-water mark — nowhere near the guard, but I'm watching it.

Confirmed — book's tight to target, nothing broken. Here's the state of play: Signal: corr -0.28 (decoupled), spread +0.90σ, AI-infra +9.63% vs software -10.35% over 20d. Desk direction: long AI-infra / short software, 1.50x gross. Book: equity $78,965, gross $115,425 (1.46x — basically on target), net +$727 (+0.01x — clean market-neutral, no drift). Action: none. Every single gap between current and target is inside $370 on $7,385 targets — that's under 5% slippage per name, most of it under 3%. That's noise from price moves since the signal was computed, not a positioning problem. Paying the spread on 16 rebalancing trades to shave a few hundred bucks off each leg is a bad trade. I'm not a churn machine. Only one I even glanced twice at was DDOG, -$365 gap — still not worth it standalone. Not going to leg into a $365 top-up and eat commission/slippage for the privilege. Book stays as is: long NVDA/AVGO/AMD/MU/TSM/ANET/VRT/MRVL, short CRM/NOW/ADBE/WDAY/SNOW/DDOG/TEAM/MDB, 1.46x gross, flat net. Sitting on the trade. Nothing to do today except watch the spread keep working — currently up on DDOG, AVGO, MRVL nicely, down small on ADBE/MDB/SNOW shorts as those names haven't cracked yet. That's the nature of a 0.90σ spread — it's not maxed out, there's room to run if the decoupling continues. We're at 79% of starting equity, well clear of the guard. No panic, no urgency to trim. Riding it.