Loss report

One named failure mode, one position it happened to, and the arithmetic that connects them — the first half of the course, submitted as a subtraction.

Due: 12 April 2027 · Weight: 40%

The brief#

Account for one loss you have taken this semester, name the mechanism that caused it, and show that it was that mechanism and not the market.

The second half of that sentence is the assignment. Anybody can report that a position went down; the work here is separating the part of the movement that belongs to the market from the part that belongs to a decision you made, and having the records that let you do it.

Pick one of three#

Your report names exactly one failure mode, and it has to be one of these:

Cost drag (week 2). What transacting cost you, before the market had an opinion. Available to everyone, guaranteed to have happened, and the thinnest answer on the list — the diagnosis is a subtraction, so a report built on it has to earn its marks somewhere other than the arithmetic. If you choose this one, the counterfactual is “I did not transact at all”, and you should expect to be asked why the number is as large as it is.

Concentration (week 3). The size you chose in week 1, the fall that happened, and whether your account moved by the amount the multiplication predicted. If those three do not agree, find out why before you submit; the disagreement is usually a fee you did not record.

Return chasing (week 4). What you sold, what you bought, what your evidence was, and the gap between the position you hold and the one you refused. This one asks the most and is worth the most, because the diagnosis cannot be assembled at the end — it needs the counterfactual entry you filed on the day.

The other modes are not on this list for specific reasons. ruin cannot be realised in six weeks, which is week 1’s whole point. leverage is forbidden with real money by the bounded-loss policy, so nobody can evidence it as a position. illiquidity has to be handed to you by the world and cannot happen on a paper account at all.

What you submit#

A single PDF, 800 to 1200 words, plus your position log as an appendix in any legible format.

Structure it however you like, but it must contain, findable by a marker who is not looking hard:

1. The opening position, with the price you transacted at and the side of the quote.
2. What happened, in dates.
3. The closing position, or the current one if it is still open.
4. The counterfactual, quoted from the log with the date it was written.
5. The subtraction, and the named mode it evidences.

What a strong report does#

It makes the arithmetic do the arguing. A claim like “the rotation was costly” is worth nothing; four lines of prices with a subtraction at the bottom is worth the marks, and it is shorter.

It also says what it cannot show. After week 6 you know your log prices assume a fill that is instant and complete at the quoted price, so a report that quietly relies on that assumption is weaker than one that names it and says by roughly how much it flatters the number.

Word count is a ceiling, not a target. The best reports in this course are usually near the bottom of the range, because the work is in the log rather than in the prose.