Will Quant Trading Wipe Out Traditional Trading?
Hey Fellow monkeys,
What do you guys think?
I've been researching a lot about S&T and Quant trading the past few days and have talked to my seniors and a handful of people in the industry. Most seem to concur that trading desks are shrinking and being taken over by computers. However, with the Trump being elected and his promise to help deregulate banks, will trading see a come back?
So I was hoping to get your thoughts and views on this matter!
Thanks~
I have noticed that for the recent years the trend is in favor of quant trading from viewing job posts !! It might be an observation bias.
However, news like that bring some hope for the traditional trading :
http://www.zerohedge.com/news/2016-10-19/how-34-year-old-goldman-trader…
Wow, a $100m in 6 months pretty crazy! But I'm not sure if that can happen regularly...That aside, I have to agree with you about the job posts section, i had the opportunity to talk to a VP at Citi @ SG who told me their trading desks are shrinking pretty sizeably, whilst getting replaced by quants who manage the systems.
That GS story shows that if you don't want to write code/develop algorithms, to choose the most illiquid product possible.
It's hard to have a fully automated trading system moving around CDO/CLO/RMBS/CMBS/CDS/ABS/insert-acronym-here when trading those requires picking up the phone and people can make up whatever price they want for them.
Learn something new here everyday! Thanks :)
However, if Trump manages to revoke Dodd-Frank, do you think traditional trading could start coming back up? Or is Quant trading the direction everyone is going to take regardless?
In the equities world I see cash 100% going quant, except MM in ETFs. EDG I think Options guys may go quant for exchange traded but OTC look for people to remain, there is some weird sh*t you can do with options. Equity swaps, execution will go quant but pricing will stay in hands of humans (computers have a hard time predicting financing costs). Exotics will stay human to design and impliment but pricing will be quant.
60 Minutes Quant Story - How Speed Traders Are Changing Wall Street (Originally Posted: 10/10/2010)
http://www.cbsnews.com/stories/2010/10/07/60minutes/main6936075.shtml?t…
Did anybody just watch 60 minutes on CBS? The first story was about the "new" quant firms and their operations against more traditional forms of trading. Just wanted to hear your thoughts...
i saw it. and i am shocked.
im sure the only people that saw it are college students interested in IB bc actual IB people are probably still at work LOL
can definitely vouch for the college student interested in IB bored on a sunday night idea.
I saw it. Learned nothing new but it was cool seeing the NYSE server room.
I don't particularly like the fact that 70% of the trading is done by the computers because of how they explained that if one algorithms performs outside what its programmed to do it can have consequenses that we can't even imagine right now.
Like with everything else, I'm sure that once it happens, the government will take a look and set up 938,378 regulations to prevent it from happening again, but as usual there is no proactively preventitive work happening right now that I have heard of.
Granted, they provide liquidity and volume as well as narrow spreads, among other advantages, but the black swan is in quant trading somewhere and some market/government/fund/bb/etc. is bound to someday be the jumbo-jet engine that gets hit by it, and when that happens may god have mercy on our soul if you are a victim.
every one knows that hft is here to stay
Yea, HFT has been happening since '99.
As for 70% of all equity trading volume being accounted for by HFT, that seems a little low. Anyone have some hard numbers on this?
i think its pretty neat how firms are competing to get closer to the main server for faster access to the information...arbitrage at its finest
Where can I watch the entire video?
^60 mins website, just google it
I did all that. I can't find the full video, can anyone post a link to the entire video please?
70% to 80% but you guys have to remember that most trades going off are still being monitored by the traders. Its not like skynet is taking over people are actually watching the orders and picking spots.
what do you mean by monitored
is this like you are monitoring the NYSE floor by standing on a podium
heres the link...
and i still feel monitoring the computers and the obvious human algorithmic implementation still will not prevent a trading error as we experienced recently...and when the market declines by unloading a HUGE amount of shares do the systems then know to like "split-second" short the shares as the price falls and then re buy and gain huge profits or what...?
since we're on the subject...
http://www.reuters.com/article/idUSTRE69B3X520101012
what ever
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