MarketReview author profile
Trading and Quantitative Markets Contributor
ActiveEric Baker brings more than two decades of trading experience to MarketReview, including work with personal accounts and at a proprietary trading firm. He continues to follow and participate in markets, with a particular interest in the decisions traders make when outcomes cannot be known in advance.
His writing concentrates on process: estimating probabilities, sizing positions, comparing expected return with downside risk and deciding how much uncertainty a strategy can bear. He also draws an important distinction between decision quality and outcome. A winning trade may have been poorly judged, while a sound decision can still lose money.
Eric contributes to MarketReview’s coverage of active trading, futures, derivatives and quantitative decision-making. He explains numerical ideas in practical terms, while making clear that models and calculations are tools for managing uncertainty—not ways to remove it.
Published work
News, analysis and evergreen financial guides credited to this author.
Hedge fund fees do more than reduce returns: management fees, performance fees, high-water marks and hurdle rates shape manager incentives and determine how much of the upside investors keep.
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Hedge funds can reduce particular portfolio risks through hedging, position sizing, liquidity management and active exposure control, but those tools can also create new risks when they are used poorly.
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Hedge funds can pursue returns through long and short positions, leverage, derivatives, relative-value trades and active exposure management, but the same flexibility can magnify losses and costs.
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Fixed income funds can make bond investing easier, but their prices, income and risks depend on what they own, how long their bonds last and how the fund is managed.
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The useful role of fixed income changes with the date your money will be needed, so bond maturity, duration and credit risk should fit the portfolio’s actual goals.
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Fixed income can add income and stability to a portfolio, but the right balance depends on what the bonds are meant to do, the investor's time horizon, and the risks already present elsewhere.
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Inflation can erode the purchasing power of fixed-income payments and also pressure bond prices when market interest rates rise.
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Fixed income can reduce some investment risks, but higher yields usually require accepting more credit, interest-rate, inflation or liquidity risk.
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IPO stocks can offer unusual trading opportunities, but limited price history, restricted float and rapid shifts in supply and demand can make mistakes more expensive.
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