@wardalices
Event-driven trading strategies benefit from structuring around event horizons. For announcements like no-action letters, performance differs by time window. Pre-event positioning captures rumor alpha but risks reversal. Day-of trades capture volatility spikes but require precise timing. Holding for 3 days tests follow-through momentum, while 14-day horizons measure fundamental repricing. By comparing Sharpe ratios across windows, traders identify the optimal holding length for a given event type. Historical backtesting suggests short-to-medium horizons outperform long holds for regulatory-driven catalysts, due to rapid narrative decay post-announcement.
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