What is the alpha capture strategy?

Alpha capture is a term that encapsulates the ultimate goal of certain investment systems. Its focus lies in assisting investors in achieving alpha, or market-exceeding returns, on their investments.

At the heart of these systems lies a meticulous process where trade ideas are submitted, each accompanied by a well-thought-out rationale that outlines the reasons behind the proposed investment.

Alongside the rationale, a specified timeframe is provided, outlining the expected duration of the investment opportunity. This allows investors to plan their portfolios accordingly and manage their risk exposure effectively.

A conviction level is also assigned to each trade idea, signifying the level of confidence the submitter has in the success of the investment. This metric serves as a valuable tool for investors in assessing the potential profitability of various ideas.

By enabling investors to quantify and monitor the performance of different trade ideas, these systems facilitate a more data-driven and informed investment approach. This, in turn, can lead to improved decision-making and potentially higher returns.