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Yes, Renaissance is an exception. I would argue that their nature of their strategies almost puts them into a pseudo market maker category (I've personally neve
by osrec 9y ago
Yes, Renaissance is an exception. I would argue that their nature of their strategies almost puts them into a pseudo market maker category (I've personally never worked with/for them, but I hear much of their strategy is statistical arbitrage, made possible by favourable transaction fee set ups and fast, colocated execution infrastructure).
- cma 9y agoPlus apparently some dodgy "creative" tax code interpretations around short-term/long-term gains.
- cheez 9y agoIs it dodgy? You buy a share in a fund, that fund buys and sells, should you pay capital gains on every sale that fund makes? I don't think that has any precedent. You pay tax when you sell your share.
- cma 9y agoThe type of strategy they employed isn't something small time investors could. It was a complex option scheme essentially buying options on their own short term trading.
- dsacco 9y agoWhile what you're saying is true, in fairness there are two caveats: 1. Virtually all profitable strategies run by hedge funds are inaccessible to small time investors nearly by definition, because they have more capital and lower capacity constraints, 2. The partnership you're talking about with Deutsche Bank doesn't account for most of their returns, and was only in effect in the last decade, not decades before.
- dredmorbius 9y agoAny info on the colo'd infrastructure?
- osrec 9y agoUnfortunately not, I'm afraid. I would guess they have much of their execution infrastructure in the same data centre as the exchanges they execute on.
- dredmorbius 9y agoThere's a considerable early period (1980s, 1990s) when Renaissance was turning up amazing profits when electronic trading largely didn't exist. That would suggest other methods.
- osrec 9y agoPerhaps they were just market making back then as well? See this link: https://www.wallstreetoasis.com/forums/is-renaissance-technologies-really-a-hedge-fund https://www.wallstreetoasis.com/forums/is-renaissance-techno...