Going Full Rorschach: Estimating the Short Side of Virtu’s* Book
“Everything you need is already inside.” - Bill Bowerman, Track & Field Coach and Nike Co-Founder Apparently, there is this parallel universe wherein traders and asset managers are able to take each subsequent risk with the benefit of perfect information because there seems to be some implication in our feedback loop that relying on partial or even incomplete fragments of information is not worth the effort. Tsk tsk... Now, those of you who have been paying close attention [...]
Mr. Volatility: What’s the Next Catalyst?
“You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something – your gut, destiny, life, karma, whatever.” – Steve Jobs (2011) It was the one question we could be sure would be asked. Every. Time. And, it changed my perspective on the whole game... Scene: It was a Spring day, 1990. 730 am. Pre-market open equity option traders meeting. O'Connor & [...]
Case Study: What Happened to Spot Trading?
"Don’t get involved in partial problems, but always take flight to where there is a free view over the whole single great problem, even if this view is not a clear one.” – Ludwig Wittgenstein As we build - and promote - our case to elevate Alphacution's value proposition and research output to a more viable economic support model, we are beginning to focus on the development of deeper and more comprehensive premium content. This plan has been outlined [...]
Alphacution’s Book: Not Hiding, In Plain Sight
"Are you not entertained?! Are you not entertained?!! Is this not why you are here?!!" - Maximus Decimus Meridius (Russell Crowe) Executive Summary The chart that follows represents the content to be covered in this post, and foreshadows a core focus of Alphacution's research calendar for the weeks and months ahead... Furthermore, at the end this post, I am also going to ask you to support this work (in exchange for certain content benefits), like this: (INLINE SUBSCRIPTION FUNCTIONALITY [...]
Welcome to Jane Street
“You can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something – your gut, destiny, life, karma, whatever." - Steve Jobs (2011) You've got to wonder if the founders of Jane Street Group, which began as a subsidiary of Henry Capital prior to 2001, had any inclination that the "dots" would connect as they have when they were first starting out. [...]
Virtu’s, Flow Trader’s Optionality? Not So Much…
"Research is what I'm doing when I don't know what I'm doing." - Wernher von Braun In the hierarchy of preferred trade types, the riskless trade sits at the top. Capturing a perfectly hedged spread or pricing anamoly, or performing a round turn across the spread and back to flat in some temporal duration measured in micro- or even nanoseconds are examples of riskless trades. Like poker's rare royal flush hand, a mechanism to persistently discover and then [...]
Stevie Cohen’s Performance Art: Hiding in Plain Sight
“Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn’t really do it, the just saw something. It seemed obvious to them after a while” – Steve Jobs For Mitch (1957 - 2018) Let's start this one close to where we left off in The Privatization of Alpha: "He’s a dubious character – and, he maintains specific distinction as my all-time strangest interview; sitting there in [...]
Donald R. Wilson Jr’s Book: Hiding in Plain Sight
"To create something exceptional, your mindset must be relentlessly focused on the smallest detail." - Giorgio Armani Taken out of context, one might legitimately jump to the conclusion that today's installment on the Feed is about 11-time kickboxing champion, Don "The Dragon" Wilson. Or, better yet, that the initials "DRW" represent the greatest hockey team of all time, the Detroit Red Wings... However, unfortunately for Mr. Dragon and my Wings - and given the context of the mythological [...]
Jump (Experiments In) Trading, LLC
In the riverfront level of the 600 W. Chicago building (which is in Chicago) - the famed concrete fortress originally home to Montgomery Ward's mail order business - there used to be the trendy, over-priced hotspot known as Japonais. Japonais is gone now - after an eviction lawsuit from 2015, which apparently means they weren't high-priced enough - but, I was just thinking how much I could go for one of their blueberry saketini's about now, which is [...]
Bridgewater Associates: Modeling Ray Dalio’s Modeling
Image Credit: Brad Trent / The Times "Treat your life like a game." - Ray Dalio Before we get to the overview of our recent modeling of famed hedge fund leader, Bridgewater Associates and its founder, Ray Dalio, we need to set the stage for why this particular profiling is so important. It starts with what we have been calling personal alpha... Personal Alpha Ray Dalio is a singular phenomenon in the modern financial world. For starters, he's [...]
