Suppose that you own two accounts and you want to move money from one account to another, but there are some limits on how much you can transfer between these two accounts.
This might sound like a weird problem, but the limit does exist in real life. For example, CCP government limits how much mainland Chinese can transfer from their CNY accounts to oversea accounts ($50,000 per year). The US government also limits how much their people can contribute to Roth IRA ($6,000 per year).
If both accounts can access the same market, it's possible to do the transfer w/o transacting between two accounts. It's called statistical tunneling. Here is how it works:
Say that you have some opinion on the market, You can long or short the market, buy or sell volatility. The exact strategy doesn't matter, but you always execute your favorable trades on one account, and simultaneously execute one equal but opposite trade on the other.
As long as you have more than 50% chance to be correct -- basically better than a monkey flipping a fair coin :-) , you can effectively move money from one account to another. The strategy will generate a loss on the source account , which may be desirable for tax purpose.
You don't need to be 100% correct on your trades because the combined accounts will never lose money except transaction cost. If you have zero or very low commission fees, you can trade as often as you want.
If you're consistently wrong about the market, that's also OK. Just flip your trades and the money should flow in the opposite direction. So, you can overlay this strategy onto whatever overall portfolio you have, and the money will move from one account to another.
