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does the analysis also includes HFT traders? Also I remember hearing that Goldman Sachs didn't have a single day of trading loss. Maybe the smaller Quant funds

does the analysis also includes HFT traders? Also I remember hearing that Goldman Sachs didn't have a single day of trading loss. Maybe the smaller Quant funds are loosing out on talent to the bigger firms?

jakarta 16y ago
Just look at the Goldman Sachs Alpha Fund as an example of a quant fund with a big firm that had terrible performance. To clarify: the size of the fund is not necessarily an indicator of whether it will be successful or not.
- akshayubhat 16y ago
  interesting http://www.forbes.com/2007/08/09/goldman-sachs-alpha-markets-equity-cx_er_0809markets07.html http://www.forbes.com/2007/08/09/goldman-sachs-alpha-markets... says that the fund failed in ~ 2007, while this article talks latest debacles. Thanks for the reference.
akshayubhat 16y ago
on an unrelated note: I monitor visitors to my online resume and I just got an email saying someone from GS.com visited my resume. I guess there is an GS developer amongst us, may be he can elaborate.
retube 16y ago
As a former trader, I can assure you that's bollox. No desk trading anything has never had a losing day.
- smanek 16y ago
  An individual desk might not, but it's not that unlikely for the firm as a whole to.
  - retube 16y ago
    No, it's not. GS take big risk, they run large exposures as a bank. They'll have their down days.
ezl 16y ago
You are referring to Q1 2010, GS had 3 months without a single day of trading losses. During the same period, JPM, C, and BAC also had a perfect quarter (1). While its true that HFT groups tend to have great win/loss records (2), those "trading profits" basically have nothing to do with the banks' HFT groups. The banks basically all had very big carry trades on -- they were borrowing at short term rates from the fed and lending at higher rates to others and collecting the spread. Since the Fed was desperate to pump money into the system, they allow banks to borrow cheaply and essentially guaranteed the carry trade for the short term. That sort of trade tends to be highly stable in static rate environments and you get very smooth return profiles. Since they knew the Fed was essentially backing the trade, they piled onto the trade and that particular component of the firms' total daily P&L just dwarfs the rest of their "real" prop trading operation P&L. Of course, it won't last forever. Its the sort of trade that works until it doesn't -- Long Term Capital Management basically had super levered carry trades on which gave them a really high sharpe ratio until things got choppy and they blew out. 1: http://www.businessweek.com/news/2010-05-11/-perfect-quarter-at-four-u-s-banks-shows-fed-fueled-revival.html http://www.businessweek.com/news/2010-05-11/-perfect-quarter... 2: Tradeworx claims to have not had a down day in 4 years, reference http://dealbook.blogs.nytimes.com/2010/05/17/speedy-new-traders-make-waves-far-from-wall-st/ http://dealbook.blogs.nytimes.com/2010/05/17/speedy-new-trad...

jakarta 16y ago

Just look at the Goldman Sachs Alpha Fund as an example of a quant fund with a big firm that had terrible performance. To clarify: the size of the fund is not necessarily an indicator of whether it will be successful or not.

akshayubhat 16y ago
interesting http://www.forbes.com/2007/08/09/goldman-sachs-alpha-markets-equity-cx_er_0809markets07.html http://www.forbes.com/2007/08/09/goldman-sachs-alpha-markets... says that the fund failed in ~ 2007, while this article talks latest debacles. Thanks for the reference.

akshayubhat 16y ago

on an unrelated note: I monitor visitors to my online resume and I just got an email saying someone from GS.com visited my resume. I guess there is an GS developer amongst us, may be he can elaborate.

retube 16y ago

As a former trader, I can assure you that's bollox. No desk trading anything has never had a losing day.

smanek 16y ago
An individual desk might not, but it's not that unlikely for the firm as a whole to.
- retube 16y ago
  No, it's not. GS take big risk, they run large exposures as a bank. They'll have their down days.

ezl 16y ago

You are referring to Q1 2010, GS had 3 months without a single day of trading losses. During the same period, JPM, C, and BAC also had a perfect quarter (1). While its true that HFT groups tend to have great win/loss records (2), those "trading profits" basically have nothing to do with the banks' HFT groups. The banks basically all had very big carry trades on -- they were borrowing at short term rates from the fed and lending at higher rates to others and collecting the spread. Since the Fed was desperate to pump money into the system, they allow banks to borrow cheaply and essentially guaranteed the carry trade for the short term. That sort of trade tends to be highly stable in static rate environments and you get very smooth return profiles. Since they knew the Fed was essentially backing the trade, they piled onto the trade and that particular component of the firms' total daily P&L just dwarfs the rest of their "real" prop trading operation P&L. Of course, it won't last forever. Its the sort of trade that works until it doesn't -- Long Term Capital Management basically had super levered carry trades on which gave them a really high sharpe ratio until things got choppy and they blew out. 1: http://www.businessweek.com/news/2010-05-11/-perfect-quarter-at-four-u-s-banks-shows-fed-fueled-revival.html http://www.businessweek.com/news/2010-05-11/-perfect-quarter... 2: Tradeworx claims to have not had a down day in 4 years, reference http://dealbook.blogs.nytimes.com/2010/05/17/speedy-new-traders-make-waves-far-from-wall-st/ http://dealbook.blogs.nytimes.com/2010/05/17/speedy-new-trad...