Why this Blog...?
My friend Joe, an institutional trader in Wall Street often raves about the shrinking opportunities at the trading desk. I am just an investor, an old fashioned " buy n hold" guy ( I still believe Warren Buffet who said " futures & options are time bombs" ) . So to me Joe was the Lord himself who straddled across markets and strategies day after day to deliver fantastic returns to his portfolio clients. Yet his refrain was - almost every strategy loses its steam in a matter of few days and nothing remains a multibagger no more. " There's only so much that a human can think of, combine or hedge. How many new strategies can there be...? ".
Only thing that I understood from his rant was spreads are getting narrower and there is a pressing need for dynamic trading strategies. The combinations available are infinite, Markets have become global and there are different time zones to contend with. Good ol’ Arbitrage is not just across underlying and its derivatives or a few local exchanges, they are now matched across instruments, sectors and continents. This leaves a diligent trader to consider several variables and parameters at a given time for a given trade so that he assumes only the bare minimum risk for that desired level of net return. Markets are developing each day so are the new instruments and their derivatives.
Joe is right. There's only so much that a human can do.
But algorithmic models processed thro a high speed computer can go far beyond.
I told Joe to get a few knowledgeable traders together to act as Mentors ( to define what they want the model to do ) and a few geeks together who can develop an algorithmic engine which could manipulate as many user defined variables as possible to spit out the best strategy for Joe.
Only thing that I understood from his rant was spreads are getting narrower and there is a pressing need for dynamic trading strategies. The combinations available are infinite, Markets have become global and there are different time zones to contend with. Good ol’ Arbitrage is not just across underlying and its derivatives or a few local exchanges, they are now matched across instruments, sectors and continents. This leaves a diligent trader to consider several variables and parameters at a given time for a given trade so that he assumes only the bare minimum risk for that desired level of net return. Markets are developing each day so are the new instruments and their derivatives.
Joe is right. There's only so much that a human can do.
But algorithmic models processed thro a high speed computer can go far beyond.
I told Joe to get a few knowledgeable traders together to act as Mentors ( to define what they want the model to do ) and a few geeks together who can develop an algorithmic engine which could manipulate as many user defined variables as possible to spit out the best strategy for Joe.
So here's my opportunity for you geeks. Those of you who are interested in developing world beating algorithms and financial models ( just make life easier for Joe and save me from his rants ) get in touch with me. Your compensation is for your asking so long as you will deliver ( and Joe is willing to pay for ! ).
I am serious. You can contact me with your bios at kmonyb at gmail dot com.
I am serious. You can contact me with your bios at kmonyb at gmail dot com.
posted by Krish at 4:22 AM
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