4 ms·
If you knew anything about HFT, you'd know that speed got arbitraged out more than a decade ago. Everyone is fast now. In order to make money, you need true alp
by vecter 7y ago
If you knew anything about HFT, you'd know that speed got arbitraged out more than a decade ago. Everyone is fast now. In order to make money, you need true alpha and predictive ability. It's sad to see you disparage their impressive achievements when what they've done is incredibly difficult to accomplish, especially as such a latecomer. I know because I tried it myself ten years ago when it was even less competitive and couldn't make it work.
- continuations 7y agoHow does XTX differ from a firm like Renaissance Tech?
- qeternity 7y agoImpossible to really say without splitting RenTech into its different funds (you're probably referring to Medallion) and knowing what the underlying strats are. But at a high level the difference between MMs and quant funds are AUM which means different time horizons. An MM might have a time horizon measured in mics to seconds, and might be focused on micro market analysis like the balance of order book over the next 1,000 microseconds. RenTech (likely) can't deploy all of their capital in these types of strategies so they focus on strats with better liquidity and almost certainly longer time horizons (minutes to hours and days, possibly weeks for more CTA style strats). And at the opposite end of the spectrum, Berkshire can deploy tens of billions in a single trade, but that means an investment horizon of years to decades.
- PopeDotNinja 7y agoThe real money is probably made by you renting out the server racks close to the exchanges!
- kasey_junk 7y agoLots of exchanges now capture that themselves.
- rrauenza 7y agoWhen you say “speed got arbitraged out” — what does that mean?
- smabie 7y agoIt means that it’s no longer profitable for the vast majority of firms that used to do latency arb. Most of those firms have either gone out of business or managed to discover less obvious signals
- nicoburns 7y ago> you need true alpha and predictive ability Surely all high-frequency signals are "follow what the market does, but slightly faster", and thus provide no actual value to society. It might be technically impressive, but it's useless work for personal gain. I reserve the right to be disparaging.
- deleted 7y ago[deleted]