QuantLink

Time flies... Throwback to our first article nearly 4 years ago How to become a quant PM? #hedgefunds #quantitativeresearch #portfoliomanagement #financialmarkets #quantitativefinance https://lnkd.in/dnXaS7ck

🚀 Launching a Hedge Fund: What You Need to Know Starting a hedge fund is no small feat; it's a journey filled with complexities and challenges. A recent article by Net Interest provides a comprehensive guide for those considering this ambitious endeavour. 📌 Key Insights 1️⃣ Capital Requirements: The initial capital needed is often a significant hurdle. The article suggests that a minimum of $100 million AUM is required to break even. 2️⃣ Regulatory Landscape: Understanding the regulatory environment is crucial. Whether it's SEC registration in the U.S. or FCA compliance in the UK, being well-versed in these matters can save you from costly mistakes. 3️⃣ Talent Acquisition: Assembling a top-notch team is vital. From quantitative researchers to portfolio managers, the right talent can make or break your fund. 4️⃣ Operational Challenges: From technology infrastructure to risk management, the operational aspects are often underestimated but are critical to success. 🤔 Questions to Consider What are the key differentiators that will make your hedge fund stand out in a crowded market? How can you navigate the complex regulatory landscape efficiently? What strategies can be employed to attract and retain top talent? For more details, read the full article here: https://lnkd.in/efaKQQrX

🔍 Exploring D.E. Shaw's Quant Strategy: The Mystery of Ghost Patterns In the world of quantitative trading, D.E. Shaw stands as a pioneer. With $50 billion under management, the firm has been instrumental in shaping the quant industry. But what sets them apart? The answer lies in 'Ghost Patterns'. 📊 The Genesis of Quant Trading In the late '80s and early '90s, scientists and engineers entered the hedge fund industry, challenging traditional economic theories. Unlike economists who believe in market efficiency, mathematicians at D.E. Shaw discovered statistical anomalies that couldn't be explained by economic logic. These are termed as 'Ghost Patterns'. 👻 What are Ghost Patterns? These are recurring patterns in financial markets that defy conventional wisdom. They have been highly profitable for quant firms like D.E. Shaw and Renaissance Technologies. 📈 The Liquidity Effect The video also discusses the liquidity effect, a pattern that many quant firms tried to exploit. It's the impact of large transactions on stock prices, not necessarily driven by news or information. 📉 The Fall of Long-Term Capital Management The video contrasts D.E. Shaw's approach with that of Long-Term Capital Management, a hedge fund that failed due to its reliance on normal distribution assumptions. 🔬 The Importance of Statistical Testing The video concludes by emphasising the need for rigorous statistical testing to validate trading patterns, a practice D.E. Shaw excels in. 🤔 Final Thoughts D.E. Shaw's success lies in its scientific approach to discovering unexplained patterns, giving them a unique edge in the market. For a deeper dive, watch the full video here: https://lnkd.in/daUC9MCq Video by Rocky Xu #quanttrading #quant #portfoliomanagement #hedgefunds #quantitativeresearch #financialmarkets #quantitativefinance Feel free to share your thoughts and insights! 📊👇

📣 Article Spotlight: The 50-50 Coin Toss Isn't So Even After All Ever thought a coin toss was the epitome of a 50-50 chance? Well, think again! A recent study involving a whopping 350,757 coin flips found that there's a 50.8% chance the coin will land on the same side it started on. Quite the revelation for something we often consider the gold standard of randomness! 📝 Article Summary: The study, conducted by European researchers, aimed to test the fairness of the coin toss. Contrary to popular belief, they found "overwhelming evidence" of same-side bias. The coins landed on the same side they started on 50.8% of the time, challenging the notion that coin flips are a fair 50-50 chance. 😄 Light-Hearted Take: It's amusing to think that something as simple as a coin toss, often used to settle disputes or make decisions, isn't as straightforward as we've always assumed. While it's not exactly groundbreaking, it does add a sprinkle of unpredictability to something we thought was set in stone. 🗑️ Maybe we need to throw out the coin flip question in quant interviews?! For more details, check out the full article here: Coin Flips Aren't Actually 50-50, Scientists Find

The Double-Edged Sword of AI in Quant Trading 🤖 In a recent Financial Times article, the spotlight is on the growing concerns among hedge funds and computer-driven trading firms about the risks AI poses to their profits. A fake image of an explosion near the Pentagon triggered a brief sell-off in U.S. stocks, raising questions about AI-generated misinformation. 📌 Key Takeaways: Misinformation Risks: AI's ability to produce convincing fake news and images presents a new frontier of challenges for quant firms that rely on algorithms to parse news and trigger trades. Data Integrity: Firms are developing algorithms to cross-check multiple news sources to ensure data accuracy, highlighting the importance of reputable data sources. Market Sensitivity: The incident also revealed how market-sensitive algorithms can react to misinformation, accelerating price moves and potentially leading to a cascade of selling. The rise of AI in trading is a double-edged sword, offering both opportunities and pitfalls. As technology advances, the tug of war between data integrity and market manipulation is likely to intensify. 🤔 How do you see the role of AI evolving in quant trading? 🤔 Are there foolproof methods to safeguard against AI-generated misinformation? 🤔 Is it possible to create a fully autonomous AI trader? Feel free to share your thoughts and experiences in the comments. Your insights could be the catalyst for a broader, enriching discussion. #quanttrading #quant #portfoliomanagement #hedgefunds #quantitativeresearch #financialmarkets #quantitativefinance https://lnkd.in/drR_6nbk

🎥 A Deep Dive into Steve Cohen's Trading Journey Anyone keen on understanding the nuances of hedge fund management will find this video on Steve Cohen a good watch. It offers valuable insights into his career trajectory, trading style, and the evolution of his firms. Video by Rocky Xu 👀 Why You Should Watch 📈 Gain an understanding of Cohen's unique approach to trading, influenced by poker and probabilities. 🏢 Learn about the transformation from SAC Capital to Point72, and how Cohen has adapted to market changes. 🔄 See how Point72 is diversifying its strategies to stay ahead in the game. 🔗 For a well-rounded perspective, watch the full video here: https://lnkd.in/eND5G8Bu #quanttrading #quant #portfoliomanagement #hedgefunds #quantitativeresearch #financialmarkets #quantitativefinance #riskmanagement Press play and share your insights! 📊👇

Navigating the Maze of Electronic Trading Interviews 🎯 Cracking the Code: Electronic Trading Interviews with Top Firms Interviewing for a role in electronic trading? Whether you're eyeing a position at Jump Trading, Citadel Securities, or Jane Street, you'll need to be prepared for some challenging questions. A recent article on eFinancialCareers offers a glimpse into the types of questions you might face. 🔍 Key Insights: 1️⃣ Probability Fundamentals: From calculating the odds of a red card being dealt from a deck to figuring out the probability of two people sharing the same birthday in a room of 15, you'll need to have your probability skills sharp. 2️⃣ Abstract Thinking: Citadel Securities, for instance, asks questions that require a blend of logical reasoning and abstract thought. How would you calculate the revenue of a company like Peloton without any data? 3️⃣ Market Making: Jane Street takes it a step further by asking questions related to market making, such as how you would price a roll of a six-sided die. 🗨️ Let's Engage: Your Experience: Have you ever faced a particularly challenging question in an electronic trading interview? How did you tackle it? Preparation Tips: What resources or methods have you found most effective for preparing for these interviews? The Future: As electronic trading evolves, do you think the interview process will become more or less complex? Why? 👉 For more details, check out the full article. https://lnkd.in/eDT2UUiF #quanttrading #quant #electronictrading #jobinterviews #careeradvice #financialmarkets #quantitativefinance 👇 Your thoughts and experiences can add real value to this discussion. Let's get the conversation rolling in the comments! 🗨️

📣 Article Alert: "ChatGPT: Hedge Fund’s New Edge" 📈 This should be valuable if you're in the #quanttrading or #hedgefunds space. Here's why: 🚀 The Competitive Edge: 44% of professionals already use #ChatGPT. 🔒 Banks vs. Hedge Funds: Learn why banks are cautious and what opportunities they might be missing. 📊 Sentiment Analysis: ChatGPT has outperformed other sentiment analysis tools. 🛠️ Coding Revolution: Coders using ChatGPT are 55% quicker. 🤝 Human + Machine: The synergy enhancing human decision-making, not replacing it. Read the full article below and let me know what you think! https://lnkd.in/dravTTwj #quantitativeresearch #quantitativefinance #AI

📚 The Must-Read Guide for Aspiring Quants: Mark Joshi's 'Quant Job Interview Questions And Answers' Navigating the quant job market can be a labyrinthine experience. From understanding complex algorithms to showcasing your skills in data analysis and strategy development, the journey is far from straightforward. One resource that has stood the test of time in preparing candidates is Mark Joshi's "Quant Job Interview Questions And Answers" PDF. 🔍 Why It's a Go-To Resource 1️⃣ Comprehensive Coverage: The PDF covers a wide array of topics, from stochastic calculus to programming, ensuring you're well-prepared for any curveball thrown your way. 2️⃣ Real-World Relevance: Joshi's questions are not just theoretical; they are often derived from real-world scenarios, making them highly relevant to the day-to-day challenges faced in quant roles. 3️⃣ Expert Insight: Mark Joshi, a respected figure in quantitative finance, brings a wealth of experience to the table. His insights are invaluable for anyone looking to break into or advance in the industry. It serves as a benchmark for what a well-prepared candidate should know. If you're on the hiring side, familiarising yourself with this guide can help you craft more effective interview questions and evaluation metrics. 🔗 Where to Find It https://lnkd.in/e672ARsA It's a worthy investment of time and a staple for your professional library. #quanttrading #quant #portfoliomanagement #hedgefunds #quantitativeresearch #financialmarkets #quantitativefinance #jobinterview

📣 Emerging Fee Structures Challenge Traditional '2 and 20' Model in Hedge Fund Industry In a move that defies the broader industry trend towards cost reduction, some key players in the hedge fund space are introducing new types of fees. The traditional '2 and 20' fee structure is undergoing a transformation, with the introduction of 'pass-through' and 'compensation' fees to make up for revenue shortfalls. 🔑 Key Point: The "pass-through" model is enabling multi-strategy funds to hire aggressively. Interestingly, this can sometimes elevate the effective management fee to as high as 6/7%, a significant departure from the conventional 2%. 📈 These new fees are designed to cover operational expenses, including the crucial task of hiring and retaining top-tier talent. 📉 The backdrop to these changes is a challenging environment for hedge funds, marked by a decline in new launches and average returns that lag behind broader market indices. 🤔 The introduction of these new fees is a double-edged sword. While they may help funds cover operational costs and retain talent, they also place an additional burden on investors, particularly when these fees are levied regardless of fund performance. 👀 Investors must scrutinise the value they receive in return for these additional fees. If the returns don't justify the higher costs, a shift in capital allocation could be on the horizon. With the top multi-strategy groups closed to any new outside capital, we've seen a rapid rise of multi-strategy competitors where this additional capital has gone. For more details, read the full article below. https://lnkd.in/dBfKxMBT #quanttrading #quant #portfoliomanagement #hedgefunds #quantitativeresearch #financialmarkets #quantitativefinance #feestructure #capitalallocation