{"id":4649,"date":"2023-04-13T09:44:09","date_gmt":"2023-04-13T09:44:09","guid":{"rendered":"https:\/\/prosperity.newai.com.au\/?p=4649"},"modified":"2025-04-13T10:45:55","modified_gmt":"2025-04-13T10:45:55","slug":"round-4-strategy-mastering-the-picnic-basket-arbitrage-game","status":"publish","type":"post","link":"https:\/\/prosperity.newai.com.au\/index.php\/2023\/04\/13\/round-4-strategy-mastering-the-picnic-basket-arbitrage-game\/","title":{"rendered":"Round 4 Strategy: Mastering the Picnic Basket Arbitrage Game"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"4649\" class=\"elementor elementor-4649\">\n\t\t\t\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-9fe3a8a elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"9fe3a8a\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-a24dab1\" data-id=\"a24dab1\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-9f8a314 elementor-widget elementor-widget-text-editor\" data-id=\"9f8a314\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.6.7 - 03-07-2022 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#818a91;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#818a91;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<p>Day 3&#8217;s results were quite satisfying &#8211; 150k from algo trading (30k bananas\/pearls, 17k berries, 60k+ pairs, 40k+ diving gear) plus 20k+ from manual, bringing me back to top 50.<\/p><p>Day 4 introduced several new products:<br \/>\u2981 Picnic Basket (PB)<br \/>\u2981 Three components: DIP(D), BAGUETTE(B), UKULELE(U)<br \/>The conversion rule: 4D + 2B + 1U + basket \u2192 1PB<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-0ab791f elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"0ab791f\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-4ac2fb6\" data-id=\"4ac2fb6\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-7154506 elementor-widget elementor-widget-image\" data-id=\"7154506\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.6.7 - 03-07-2022 *\/\n.elementor-widget-image{text-align:center}.elementor-widget-image a{display:inline-block}.elementor-widget-image a img[src$=\".svg\"]{width:48px}.elementor-widget-image img{vertical-align:middle;display:inline-block}<\/style>\t\t\t\t\t\t\t\t\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"2160\" height=\"1080\" src=\"https:\/\/prosperity.newai.com.au\/wp-content\/uploads\/2025\/04\/12-2.jpg\" class=\"attachment-full size-full\" alt=\"\" srcset=\"https:\/\/prosperity.newai.com.au\/wp-content\/uploads\/2025\/04\/12-2.jpg 2160w, https:\/\/prosperity.newai.com.au\/wp-content\/uploads\/2025\/04\/12-2-300x150.jpg 300w, https:\/\/prosperity.newai.com.au\/wp-content\/uploads\/2025\/04\/12-2-1024x512.jpg 1024w, https:\/\/prosperity.newai.com.au\/wp-content\/uploads\/2025\/04\/12-2-768x384.jpg 768w, https:\/\/prosperity.newai.com.au\/wp-content\/uploads\/2025\/04\/12-2-1536x768.jpg 1536w, https:\/\/prosperity.newai.com.au\/wp-content\/uploads\/2025\/04\/12-2-2048x1024.jpg 2048w\" sizes=\"auto, (max-width: 2160px) 100vw, 2160px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-cac58f3 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"cac58f3\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-6ca25f5\" data-id=\"6ca25f5\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-7f5625b elementor-widget elementor-widget-text-editor\" data-id=\"7f5625b\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<p><b>Market Making Analysis:<\/b><br \/>\u2981 Component spreads are tight (1-2)<br \/>\u2981 PB spread is wider (4-6) but still not profitable enough compared to pearls\/bananas<br \/>\u2981 Decision: Focus solely on position taking<\/p><p><b>New Strategy (V6):<\/b><br \/>This is essentially packaged pair trading:<br \/>1. Trade components vs. complete PB baskets<br \/>2. Profit from price discrepancies between components and assembled PB<\/p><p><b>Key metrics:<\/b><\/p><p>\u2981 Edge = BP_price &#8211; 4D &#8211; 2B &#8211; U &#8211; 400<br \/>\u2981 Edge fluctuation shown in following figure<br \/>\u2981 Target position:<br \/>\u00a0 \u00a0\u2981 PB: (edge\/edge_max) \u00d7 position_limit<br \/>\u00a0 \u00a0\u2981 Components: Proportional scaling<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-78671f1 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"78671f1\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-d354a46\" data-id=\"d354a46\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-dcc248e elementor-widget elementor-widget-image\" data-id=\"dcc248e\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"1133\" height=\"619\" src=\"https:\/\/prosperity.newai.com.au\/wp-content\/uploads\/2025\/04\/12-3.jpg\" class=\"attachment-full size-full\" alt=\"\" srcset=\"https:\/\/prosperity.newai.com.au\/wp-content\/uploads\/2025\/04\/12-3.jpg 1133w, https:\/\/prosperity.newai.com.au\/wp-content\/uploads\/2025\/04\/12-3-300x164.jpg 300w, https:\/\/prosperity.newai.com.au\/wp-content\/uploads\/2025\/04\/12-3-1024x559.jpg 1024w, https:\/\/prosperity.newai.com.au\/wp-content\/uploads\/2025\/04\/12-3-768x420.jpg 768w\" sizes=\"auto, (max-width: 1133px) 100vw, 1133px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-530a764 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"530a764\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-c80378d\" data-id=\"c80378d\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-47aecfb elementor-widget elementor-widget-text-editor\" data-id=\"47aecfb\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<p><b>Execution Approach:<\/b><\/p>\n<p>\u2981 Adapted from Strategy V3:<br>&nbsp; &nbsp;\u2981 Aggressive trading when position gap is large<br>&nbsp; &nbsp;\u2981 Passive trading when near target<\/p>\n<p>\u2981 Key challenge: High transaction costs<br>&nbsp; &nbsp;\u2981 Example: 4D+2B+1U+PB spread = 10<br>&nbsp; &nbsp;\u2981 Requires more cautious execution than standard pair trading<\/p>\n<p>The manual trading game changed completely this round &#8211; an interesting newspaper-based trading challenge to discuss next.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Day 3&#8217;s results were quite satisfying &#8211; 150k from algo trading (30k bananas\/pearls, 17k berries, 60k+ pairs, 40k+ diving gear) plus 20k+ from manual, bringing me back to top 50. Day 4 introduced several new products:\u2981 Picnic Basket (PB)\u2981 Three components: DIP(D), BAGUETTE(B), UKULELE(U)The conversion rule: 4D + 2B + 1U + basket \u2192 1PB [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":4537,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33],"tags":[],"class_list":["post-4649","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-2023r4"],"acf":[],"_links":{"self":[{"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/posts\/4649","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/comments?post=4649"}],"version-history":[{"count":19,"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/posts\/4649\/revisions"}],"predecessor-version":[{"id":4670,"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/posts\/4649\/revisions\/4670"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/media\/4537"}],"wp:attachment":[{"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/media?parent=4649"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/categories?post=4649"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/tags?post=4649"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}