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Tall dark strategy?

Published in Automated Trader Magazine Issue 18 Q3 2010

 

What does the future hold for quant traders? Stuart Farr, President of Deltix, looks into the very long term.

 

Growth in high frequency trading is driven by a variety of factors, but that growth is itself becoming a determining factor in the future evolution of quantitative strategies. Best execution requirements, fragmentation and the ongoing effect of 'Moore's Law' (higher performance IT at decreasing cost over time); all of these have brought quantitative trading within the reach of a wider contituency of market participants: institutional managers, hedge funds, CTAs and independent proprietary trading fi rms. With further reductions in the cost of technology, and with it increasing competition in HFT, it seems likely that there will be fewer (and less pronounced) pricing inefficiencies, not least in the US equities markets. Couple that with increasing competition and crowding in high (and low) frequency trading, and the urgent question presents itself: where do quant strategists go from here?

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