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Medallion Fund appears to be a front running quant fund. Their reported returns relied on being a millisecond ahead of large orders. They charge a hefty chunk
by tosseraccount 11y ago
Medallion Fund appears to be a front running quant fund.
Their reported returns relied on being a millisecond ahead of large orders. They charge a hefty chunk of that "return".
It would be very risky to assume that their advantage will continue in the next 20 years.
- infinite8s 11y agoBeing faster at responding to market events does not make you a frontrunner.
- tosseraccount 11y agoWell.. What they do is often pejoratively called "front running". A carefully crated google can serve as witness : https://www.google.com/?gws_rd=ssl#q=medallion+front+running https://www.google.com/?gws_rd=ssl#q=medallion+front+running I certainly meant it in that sense. I'm not accusing the Medallion of illegal front running. I think people like Brad Katsuyama and fixing the "early information" problem are the answer to this kind of behavior. Katsuayama is working on a system to make the fight between high frequency traders and other investors more fair. Good write up is here : http://www.nytimes.com/2014/04/06/magazine/flash-boys-michael-lewis.html http://www.nytimes.com/2014/04/06/magazine/flash-boys-michae... ... "Coil the fiber. Instead of running straight fiber between the two places, why not coil 38 miles of fiber and stick it in a compartment the size of a shoe box to simulate the effects of the distance. And that’s what they did."
- harryh 11y agoYou should read http://www.amazon.com/Flash-Boys-Insiders-Perspective-High-Frequency-ebook/dp/B00P0QI2M2 http://www.amazon.com/Flash-Boys-Insiders-Perspective-High-F... before you decide to believe anything in Flash Boys. Most of that book is ignorant at best or outright deceptive at worse. Brad Katsuyama's dark pool is definitely deceptive.
- tosseraccount 11y agoSounds like a little pushing and shoving in the big game to me. Play on.