From Algo Trades to Quants: Future of Trading

Posted by Dr. James Canton on August 23, 2007 under Uncategorized | Be the First to Comment

The connection here is that the current rage of hedge funds and private equity Dark Pools is to use advanced computer-based trading called Algo and Quants to find new profit opportunities in global trading markets. Though this futurist thinks AI and computers gaining an edge makes sense, and we use them in our business, the history of this strategy is spotty at best. Yes, there are billions at play here with the major global trading companies like Merrill, Morgan Stanley, Citi and Barclay’s. But when you combine this trend with a depreciating asset class, sub-prime real estate that is part of the global financial “layer cake” of funds, banks and organizations, the stakes are higher, the risks are greater for break-downs–or a return to balance between risk and value.

This futurist thinks the game has just begun and there will be other asset classes that may fall out of favor–metals, oil, equities, take your pick. There will always be speculative viewed markets where assets have higher risk then value and will fall. Having a longer term view with an eye on the present is a smart, but change happens.