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Wired reporter Jerry Adler wrote a very well researched article on Wall Street high speed trading. It was originally scheduled for Wired's September issue but published in advance due to the 440M trading loss at Knight Capital Group.
The author provides very interesting takes on the quants, their world and their obsession with more speed. Many people mentioned in this article are not stranger to our community so it's good read.
The 2012 New York Battle of the Quants, a two-day conference of algorithmic asset traders, took place in New York City at the end of March, just a few days after a group of researchers admitted they had made a mistake in an experiment that purported to overturn modern physics. The scientists had claimed to observe subatomic particles called neutrinos traveling faster than the speed of light. But they were wrong; about six months later, they retracted their findings. And while “Special Relativity Upheld” is the world’s most predictable headline, the news that neutrinos actually obey the laws of physics as currently understood marked the end of a brief and tantalizing dream for quants—the physicists, engineers, and mathematicians-turned-financiers who generate as much as 55 percent of all US stock trading. In the pursuit of market-beating returns, sending a signal at faster than light speed could provide the ultimate edge: a way to make trades in the past, the financial equivalent of betting on a horse race after it has been run.
On the first day of the New York conference, Aaron Brown, a legendary quant and former professional poker player, took the stage in rumpled chinos and a leather jacket to lecture the assembly on game theory. He began his talk by saying, “3.14159,” and then pausing expectantly. From the back of the room came the response: “265358.” Together they made up the first 12 digits of pi—a geek shibboleth. “You won’t see a lot of masters of the universe here,” said Charles Jones, a professor of finance and economics at Columbia Business School. “A lot of these guys, if they’re wearing a tie, it might be the only one they own.”[prbreak][/prbreak]
The author provides very interesting takes on the quants, their world and their obsession with more speed. Many people mentioned in this article are not stranger to our community so it's good read.
The 2012 New York Battle of the Quants, a two-day conference of algorithmic asset traders, took place in New York City at the end of March, just a few days after a group of researchers admitted they had made a mistake in an experiment that purported to overturn modern physics. The scientists had claimed to observe subatomic particles called neutrinos traveling faster than the speed of light. But they were wrong; about six months later, they retracted their findings. And while “Special Relativity Upheld” is the world’s most predictable headline, the news that neutrinos actually obey the laws of physics as currently understood marked the end of a brief and tantalizing dream for quants—the physicists, engineers, and mathematicians-turned-financiers who generate as much as 55 percent of all US stock trading. In the pursuit of market-beating returns, sending a signal at faster than light speed could provide the ultimate edge: a way to make trades in the past, the financial equivalent of betting on a horse race after it has been run.
On the first day of the New York conference, Aaron Brown, a legendary quant and former professional poker player, took the stage in rumpled chinos and a leather jacket to lecture the assembly on game theory. He began his talk by saying, “3.14159,” and then pausing expectantly. From the back of the room came the response: “265358.” Together they made up the first 12 digits of pi—a geek shibboleth. “You won’t see a lot of masters of the universe here,” said Charles Jones, a professor of finance and economics at Columbia Business School. “A lot of these guys, if they’re wearing a tie, it might be the only one they own.”[prbreak][/prbreak]
