# Feints in Soccer and Stocks, from Vincent Andres

January 6, 2008 |

Ramping can only be effected by a large trading desk that can act in concert within a few minutes. When they start the move by say, buying in unison, a few minutes later naive traders pile on thinking they have picked off another trading team's signals. Meanwhile the original trading desk dumps their stock for a quick profit at the expense of the traders who have fallen for the decoy signals. PMcD.

This comment (and many others in the same vein) remind me exactly of a soccer dribble.

Player A has the ball and is in front of player B. A plans to pass on the left side, and thus A will feint going on the right side. The feint must have the maximum visual effect to lure B, and simultaneously the minimum real effect, in order for A not to go too much in the feinted (wrong) side. With some maths, one would say that A's position will exhibit as positive, but with all derivatives being negative (A has no intention to continue the move, quite the contrary).

If/when the feint works, it provokes an overreaction from B, (which B feels is necessary in order to catch up the delayed/lost part of the move), ie 1st and 2nd derivatives for B strongly positive.

If the provoked inertia/momentum is great enough, this will put B in the zag when A is in the zig. Enough to extract a little profit.

Of course, in soccer good players are able to change/adapt their plan during the dribble, if things don't work immediately as expected.

Player A may well be a restricted group of people acting together, Player B = the crowd (the expression "sucker rally" comes also to mind).

Such description is alas strongly non-predictive. Apologies. How to calculate derivatives with such noisy functions as stock prices? Which are the adequates variables/functions to consider ?

On the other hand, I suspect the example database to be potentially huge !

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