Alphacution takes a fascinating trip down the rabbit hole with some new data time-weighted BBO spreads for ETPs traded on the London Stock Exchange. Where we're headed: Detailing the product selection and trading preferences of a certain subset of systematic internalisers...
Alphacution is constantly surveilling the landscape for clues of strategy capacity constraints and opportunities for strategy capacity expansion - and the impacts that those constraints and opportunities are likely to have throughout the capital markets ecosystem. Here's one finding that we found fascinating...
Thanks to reporting from our friends at Flow Traders, Alphacution walks through a storyboard of ETP market attributes to arrive at an estimate for the structural (market making) revenue potential of the global and regional ETP markets...
It's been a long time coming... And now, after a few years of digging for data, modeling that data, creating pictures of that modeling, publishing snippets of insight around those pictures, growing our network to the point where several thousand of you are regular consumers of our output, and ultimately earning enterprise subscriptions and other engagements from many of the top trading firms in the world and other key ecosystem stakeholders, Alphacution is formally moving to a subscription model.
"My wife says, 'If you've got time to lean, you've got time to clean.' So, if I'm exhibiting any sloth-like behavior, she puts a rake or a broom in my hand pretty fast..." - Tim Lind, Managing Director, DTCC Data Services For the first episode in its podcast series, "Advancing Financial Markets. Together." Alphacution's Director of Research, Paul Rowady joins the Depository Trust & Clearing Corporation's (DTCC) Managing Director, Data Services, Tim Lind and Executive Director, Marketing and Communications, Bari Trontz for a spirited and illuminating discussion entitled, "Passive vs. Active Strategies: How Data Can Help Keep Your Investments in Shape."
Alphacution Director of Research, Paul Rowady, joins eXponential Finance Podcast host and Tokyo FinTech founder, Norbert Gehrke, for a spirited – if not, highly-caffeinated – and entertaining discussion covering a wide range of Alphacution’s most illuminating research themes, from the genesis of its trading and asset management ecosystem map to the concept of alpha capacity to the implications of the current commission-free trading landscape and, of course, the riveting Robinhood phenomenon. Enjoy…
"Education is all a matter of building bridges." - Ralph Ellison How trading firms, hedge funds and asset managers scale - as in, scale assets under management (AUM) or proprietary capital, headcount, data, technologies, and other operational ingredients to support a growing mix of market strategies when their initial market strategies reach boundaries of performance, liquidity, inventory or competitive challenges - is a significant point of fascination here at Alphacution. This is because scaling - real, sustainable scaling - requires simultaneous and interdependent success in both operational and trading strategies. Scaling also becomes a critical issue to measure and monitor from a market macrostructure perspective if you believe the hypothesis that the capacity of alpha is finite, as we introduced in the Feed post, "The Privatization of Alpha." Because if you believe that there are no constraints on the capacity of outperformance - or, "alpha" - then there is no need to pay attention to how various asset managers scale their strategies and their overall businesses. In this scenario, there [...]
“Study the science of art. Study the art of science. Develop your senses — especially learn how to see. Realize that everything connects to everything else.” — Leonardo Da Vinci (~1500) "Hedge funds — there are too many of them and most of them are lousy." - Stevie Cohen (2016) The highest Sharpe Ratios - which, for the uninitiated, is a measure of risk-adjusted returns for specific strategies and financial portfolios - now live behind a declining roster of gilded gates. And the impacts of this "privatization of alpha" are enormous for the asset management industry and its stakeholders. Alphacution expects additional consolidation, concentration, re-engineering, disruption, disintermediation, and exits to be on the menu for this group along the road ahead. Here's the setup: Continuing on the overarching and transformational theme for how information technology impacts the constellations of strategies, players and markets in the financial universe, Alphacution has been leveraging its growing model library to focus on the development of a comprehensive asset management ecosystem "map" to demonstrate, along with many other [...]
