200+ Hedge Funds and Private Equity Executives at Golden Networking's High-Frequency Trading Happy Hour at Johnny Utah's
Executives from Hedge Funds, Fund of Funds, Private Equity, Electronic Trading and High-Frequency Trading Expected at Golden Networking's High-Frequency Trading Happy Hour, September 14, at Johnny Utah's
New York, NY, August 13, 2010 --(PR.com)-- Hundreds of executives, professionals and investors in the High-Frequency Trading, Hedge Funds, Fund of Funds, Proprietary Trading, Quantitative and Algorithmic Trading worlds, including representatives from Citi, JP Morgan, Bank of America Merrill Lynch, Deutsche Bank, Morgan Stanley, among many others, are coming to swanky Johnny Utah's on September 14, for an evening of upscale business networking over drinks and complimentary appetizers at Golden Networking's High-Frequency Trading Happy Hour (http://www.HFTHappyHour.com). Given the success of the concept, Golden Networking will continue hosting these Business Receptions the 2nd Tuesday of every month.
As High-Frequency Trading systems are becoming a lot faster, high-frequency traders need to make sure their systems are running at the highest speeds, if their strategies require so to be profitable. Maximizing speed as well as reducing latency is paramount to a profitable high-frequency trading system. At the same time, the human role in high-frequency trading is vital. While the quants design the model and programmers code it, traders need to understand the model and actively monitor the system to make sure the algorithms are functioning in the manner they are supposed to. If an algorithm has gone wild, a human being needs to take it offline, as many high-frequency traders did on May 6th. Moreover, to be successful in high-frequency trading, traders are required to perform an autopsy on bad trades and then provide feedback to R&D. Even when the system is making money, traders need to make sure that it’s because the algorithm is working properly, otherwise it will lead to losses down the road.
As to developing a trading system, first high-frequency traders have to know where to invest their resources, figuring out what can be outsourced and not wasting valuable time and capital reinventing the wheel. Focus should be on developing the algorithm or whatever it is that differentiates it from competitors. There are seven sources of competitive advantage: (1) strategic creativity, having creative trading ideas, (2) quantitative improvement, do it better and more efficiently than your benchmark, (3) data cleaning and optimization, get a better look, (4) order execution, (5) transaction cost minimization, (6) Rapid Model Development (RMD), and (7) strategy portfolio management, each strategy is treated as a product production cycle.
After recognizing that strategies don’t last forever, it’s imperative to have the capability to quickly deliver a new model that works according to specifications. Under this concept, a rigorous team-based approach is required to provide a consistent framework of four repeatable stages of system development: research, backtesting, implementation and management. The core and backbone of any high-frequency trading strategy is the algorithm that deciphers the data and makes the buy and sell decisions. Importantly, it shouldn’t just be one algorithm but a portfolio of them. Some firms run up to 50 algorithms at the same time, while only 10+ are funded, allowing automatic and instantaneous fund allocation.
In regard to opportunities and the future for high-frequency trading, which will subject of debate at High-Frequency Trading Happy Hour, industry participants can expect greater access to electronic trading in more exchanges. In emerging markets, Singapore and India are particular points of interest in the near future, as is China in the long term; a lot of risk capital is on the lookout for investing opportunities in these markets. Additionally, participants can expect to see increased investment allocation from asset management firms. From an evolution stand point, participants can expect increased automation and greater speed requirements, and should recognize that latency arbitrage is part of the past. Model development ought to focus on building more robust systems with greater understanding of correlation and investor psychological behavior. As for regulation, participants need to remain vigilant and proactive for the threat of transaction tax, trade cancellation fees, as well as other regulatory changes that can potentially erode profitability.
High-Frequency Trading Happy Hour is produced by GoldenNetworking.net (http://www.goldennetworking.net), the premier networking community for business executives, entrepreneurs, investors and diplomats, founded by former McKinsey consultant and Columbia Business School MBA Edgar Perez. Upcoming Golden Networking's Forums and Business Receptions include:
- Distressed Investing Experts Forum 2010, "Analyzing and Valuing Distressed Companies, Securities and Real Estate" (http://www.DistressedInvestingExpertsForum.com), September 21st, New York City
- 2nd China Leaders Forum, "Challenges and Opportunities for China's Economic Juggernaut" (http://www.ChinaLeadersForum.com), October 6th, New York City
- Latin America Leaders Forum 2010, "Unlikely Oasis of Growth amid the Global Economic Crisis?" (http://www.LatinAmericaLeadersForum.com), October 21st, New York City
- 1st Finance Leaders Forum, "How the New Financial Legislation Will Impact You and Your Business" (http://www.financeleadersforum.com), November 4th, New York City
- 2nd Banking Leaders Forum, "Private Banking on the Brink of Transformational Change" (http://www.BankingLeadersForum.com), November 18th, New York City
- Global Energy Leaders Forum 2010, "Proposals and Solutions for Today's Global Energy Challenges" (http://www.GlobalEnergyLeadersForum.com), December 2nd, New York City
- 2nd Private Equity Leaders Forum, "Setting the Stage for Radical Transformation in 2011 and Beyond" (http://www.PrivateEquityLeadersForum.com), December 9th, New York City
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As High-Frequency Trading systems are becoming a lot faster, high-frequency traders need to make sure their systems are running at the highest speeds, if their strategies require so to be profitable. Maximizing speed as well as reducing latency is paramount to a profitable high-frequency trading system. At the same time, the human role in high-frequency trading is vital. While the quants design the model and programmers code it, traders need to understand the model and actively monitor the system to make sure the algorithms are functioning in the manner they are supposed to. If an algorithm has gone wild, a human being needs to take it offline, as many high-frequency traders did on May 6th. Moreover, to be successful in high-frequency trading, traders are required to perform an autopsy on bad trades and then provide feedback to R&D. Even when the system is making money, traders need to make sure that it’s because the algorithm is working properly, otherwise it will lead to losses down the road.
As to developing a trading system, first high-frequency traders have to know where to invest their resources, figuring out what can be outsourced and not wasting valuable time and capital reinventing the wheel. Focus should be on developing the algorithm or whatever it is that differentiates it from competitors. There are seven sources of competitive advantage: (1) strategic creativity, having creative trading ideas, (2) quantitative improvement, do it better and more efficiently than your benchmark, (3) data cleaning and optimization, get a better look, (4) order execution, (5) transaction cost minimization, (6) Rapid Model Development (RMD), and (7) strategy portfolio management, each strategy is treated as a product production cycle.
After recognizing that strategies don’t last forever, it’s imperative to have the capability to quickly deliver a new model that works according to specifications. Under this concept, a rigorous team-based approach is required to provide a consistent framework of four repeatable stages of system development: research, backtesting, implementation and management. The core and backbone of any high-frequency trading strategy is the algorithm that deciphers the data and makes the buy and sell decisions. Importantly, it shouldn’t just be one algorithm but a portfolio of them. Some firms run up to 50 algorithms at the same time, while only 10+ are funded, allowing automatic and instantaneous fund allocation.
In regard to opportunities and the future for high-frequency trading, which will subject of debate at High-Frequency Trading Happy Hour, industry participants can expect greater access to electronic trading in more exchanges. In emerging markets, Singapore and India are particular points of interest in the near future, as is China in the long term; a lot of risk capital is on the lookout for investing opportunities in these markets. Additionally, participants can expect to see increased investment allocation from asset management firms. From an evolution stand point, participants can expect increased automation and greater speed requirements, and should recognize that latency arbitrage is part of the past. Model development ought to focus on building more robust systems with greater understanding of correlation and investor psychological behavior. As for regulation, participants need to remain vigilant and proactive for the threat of transaction tax, trade cancellation fees, as well as other regulatory changes that can potentially erode profitability.
High-Frequency Trading Happy Hour is produced by GoldenNetworking.net (http://www.goldennetworking.net), the premier networking community for business executives, entrepreneurs, investors and diplomats, founded by former McKinsey consultant and Columbia Business School MBA Edgar Perez. Upcoming Golden Networking's Forums and Business Receptions include:
- Distressed Investing Experts Forum 2010, "Analyzing and Valuing Distressed Companies, Securities and Real Estate" (http://www.DistressedInvestingExpertsForum.com), September 21st, New York City
- 2nd China Leaders Forum, "Challenges and Opportunities for China's Economic Juggernaut" (http://www.ChinaLeadersForum.com), October 6th, New York City
- Latin America Leaders Forum 2010, "Unlikely Oasis of Growth amid the Global Economic Crisis?" (http://www.LatinAmericaLeadersForum.com), October 21st, New York City
- 1st Finance Leaders Forum, "How the New Financial Legislation Will Impact You and Your Business" (http://www.financeleadersforum.com), November 4th, New York City
- 2nd Banking Leaders Forum, "Private Banking on the Brink of Transformational Change" (http://www.BankingLeadersForum.com), November 18th, New York City
- Global Energy Leaders Forum 2010, "Proposals and Solutions for Today's Global Energy Challenges" (http://www.GlobalEnergyLeadersForum.com), December 2nd, New York City
- 2nd Private Equity Leaders Forum, "Setting the Stage for Radical Transformation in 2011 and Beyond" (http://www.PrivateEquityLeadersForum.com), December 9th, New York City
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GoldenNetworking.net
Edgar Perez
516-761-4712
http://www.GoldenNetworking.net
Edgar Perez
516-761-4712
http://www.GoldenNetworking.net
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