A proposed remedy to the Flash Crash is to eliminate naked short selling and to eliminate selling short without an uptick. F that! Isn't that an admission that both should be illegal. The morons are trying to slow the speed of decent by curing the symptom not the cause.. The cause is clear to see! Lay off the Kool-Aid buddy. There is no longer "Price Discovery". PD in milliseconds? Geez again, give me big F..ing break. Flash trading? Ping Pong Trading? Obama's lead economic advisor was once a director for the firm D E Shaw, from their website....
Quantitative Strategies
The firm's quantitative strategies are for the most part based on
the use of mathematical techniques to identify profit opportunities arising from subtle anomalies affecting the prices of various securities;
the application of proprietary models designed to measure and control various forms of risk;
the use of quantitative techniques to minimize the transaction costs associated with the purchase and sale of securities; and
the utilization of proprietary optimization technology to construct dynamically evolving investment portfolios based on these profit opportunities, risk factors, and transaction costs.
Our quantitative models and strategies are based on extensive internally funded scientific research conducted since 1988 at a cost of hundreds of millions of dollars. These technologies are currently deployed in a number of investment funds managed by the D. E. Shaw group, and are also used in the construction of long-only and net-long portfolios on behalf of our institutional asset management clients.
In the course of identifying profit opportunities, the D. E. Shaw group analyzes an enormous amount of data associated with tens of thousands of financial instruments, along with various factors not associated with any one such instrument. Data is obtained from many countries throughout the world, and covers a wide range of asset classes. When this analytical process yields a new model the firm believes to be of predictive value, it becomes eligible for deployment within one or more trading strategies, in some cases along with a dozen or more other models involving some of the same financial instruments, but arising from different market anomalies.
The firm's proprietary optimization technology was designed with the objective of maximizing expected return while controlling the aggregate risk associated with a portfolio that may in some cases include simultaneous positions in several thousand securities. Rather than consider each transaction in isolation, the firm's portfolio optimization software is designed to account for complex interrelationships among a large set of financial instruments that may range over a number of different asset classes. In many cases, the firm's optimization algorithms are able to enhance risk-adjusted returns not only through conventional diversification, but by establishing offsetting exposures to various risk factors at the portfolio level.
Portfolios are often reoptimized on a more-or-less continuous basis, with a steady stream of trades executed to take advantage of newly emerging potential profit opportunities and/or to manage various forms of dynamically varying risk. Time-sensitive trading decisions are often made very rapidly using real-time data obtained from various sources throughout the world's financial markets. The firm trades on nearly a 24-hour basis, and typically executes tens of thousands of transactions per day.
Sounds like a Monty Pithon episode! "The Folks" haven't a chance. |
