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mfroyesterday at 11:30 PM2 repliesview on HN

Not to mention huge quant firms that paid more than 4x your salary just to get a trading latency advantage


Replies

weitendorftoday at 12:10 AM

If you understand finance and aren’t specifically attempting to arb on that timescale, you actually want to participate in markets with those participants, because their presence gives you less variance/better price discovery on the scales that don’t factor into your decisions to buy and sell things.

So basically if you’re larping as a trader you will consistently get your ass handed to you unless you are genuinely better than all the pros, but if you’re investing or optimizing for a specific risk profile/exposure/timeline you’re playing a different game.

Anyway the fact that it’s so hard to explain this stuff to individuals does strengthen the argument that most individuals are better off following the herd.

zuzululutoday at 5:54 AM

thats one of the areas where quants squeeze edge the other is more boring where they are essentially "market neutral" and they try to figure out how to make a few cents everyday knowing the downside is a global financial crisis.

their edge is basically political so that they get a bail out and thats what the quants will never see in their models.

not to get cynical further, just do what the GP says, buy index or figure out what the biggest movers are and buy those for more exposure