RT Journal Article
SR Electronic
T1 Momentum Trading
JF The Journal of Investing
FD Institutional Investor Journals
SP 6
OP 8
DO 10.3905/joi.2000.319434
VO 9
IS 4
A1 Bruce I. Jacobs
YR 2000
UL https://pm-research.com/content/9/4/6.abstract
AB Momentum traders buy stock (often on margin) as prices rise and sell as prices fall. In essence, they are trying to obtain the benefits of a call option--upside participation with limited risk on the downside--without any payment of an option premium. The strategy appears to offer a chance of huge gains with little risk and minimal cost, but its real risks and costs become known only when it's too late--after the strategy has failed, and taken markets down with it.