Economics: Sequenced Trading - the Post Derivatives Markets

Derivatives markets are responsible for generating most of the world’s higher levels of inflation. That is principally characterised by currency trading and hedge funds. What do we use to rectify the concern, beyond the local currency revaluation via interest rate gerrymandering? We shuffle around the same international instruments - apparently fighting fire with fire when water always works better for full and active conflagrations .

The alternative market structure for anticipatory, early stage investment of a far less speculative class is what the author dubs ‘Sequenced Trading’. The comparative advantage is that technical knowledge of one type of market versus a vertically or horizontally interconnected alternative market separates those market adepts from the non-specialists. The lower subscription rate due to technical barriers to entry is what boosts the superior earnings rate than more conventional investment classes.

Sequenced Trading is performed when a sequence of price signals echoes, in a chain reaction along a vertical or horizontal channel. The Sequence Trader will use economics and technology to gain as much quick insight into when the signal will reach the major investor population of the target market. The trader will then purchase or dispose of the asset before the rest of the traditional market does. The trader also similarly anticipate the correction timing parameters. To affect maximum returns they would leverage the short-term to medium-term investment. The investor only needs to comfortably exceed the lender’s interest rate.

To securitise the loan the investor will offer collateral to the lending party. A sophisticated lender may also consider more of the alternative of trading track record in lending - effectively an industry line of credit. To lower risk the trader would need to demonstrate that they could use real collateral to trade their position back into credit, should the initial investment create a smaller debt.

That line of credit would only be useful when a very high return is offered by an event with sure gains into an alternative business, industry or market such as when their is a market shock - only a predictable plummet. For a positive market it may be worth the introduction of technology which is a market disruptor. Then and only then may a creditor offer to fund the bona fide options agreement, with a rapidly and thoroughly formulated business plan. It must be a plan which accommodates margins of safety as well as margins of comfort (profit position).

Economists would recognise that the proposed emergent market would be a sustainable microeconomic and simultaneously macroeconomic derivative instrument class, and safe platform for all participating investors and for the broader economy.

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