Strategy lab
Every strategy from 151 Trading Strategies and all 101 Formulaic Alphas as formulas you can edit and backtest on ten years of daily stocks, ETFs, futures, forex and crypto data. Free, in your browser.
15.2.2Distressed assetsReference
Buying outstanding debt
Buy a distressed company’s debt at a discount, expecting it to convert into a controlling equity stake.
Why there is no chart
Restructuring situations.
The lab runs on daily prices for stocks, ETFs, indexes, futures, currencies, crypto and Treasury yields. This strategy from 151 Trading Strategies depends on data outside that set, so it is explained and formalised here rather than backtested.
Hypothetical backtests on daily closes with no slippage unless you add costs. Survivorship bias applies: the stock list is today’s large caps. For learning, not investment advice. Data: Yahoo Finance via yfinance.
- Source
- 151 Trading Strategies
- Section
- 15.2.2 · Distressed assets
- Asset class
- Distressed
- In the lab
- Explained, not backtested
Buying outstanding debt (15.2.2)
Buy a distressed company’s debt at a discount, expecting it to convert into a controlling equity stake.
Data it needs
Restructuring situations.
More in Distressed assets
- 15.1 Buying and holding distressed debt
- 15.2 Active distressed investing
- 15.2.1 Planning a reorganisation
- 15.2.3 Loan-to-own
- 15.3 Distress risk puzzle
- 15.3.1 Distress risk puzzle – risk management
Source: Kakushadze, Z. and Serur, J. A. (2018). 151 Trading Strategies. Palgrave Macmillan. SSRN 3247865. Summaries are our own.