The computerization of the stock market and adoption of automated trading has given birth to a new class of trader.
The Quantitative trader.
This approach, made popular by the success stories of firms like Renaissance Technologies founded by Jim Simons, has grown in its complexity and market depth, progressively over time. Quantitative trading approaches are extremely technical using principles from code breaking mathematics to discover patterns in the stock market across various securities that can produce predictors of future events. Using supercomputers to run statistical models, quantitative trading tries to take advantage of certain market correlations rather than being outright long or short the market. In fact, quantitative trading is done based on modeling and does not take into account market fundamentals as its primary factor in making investment decisions. The models seek to find relationships between the different pieces of the market to identify predictive signals. In a nutshell they seek to decipher the market, taking the mystery out of what would likely look like randomness to laymen.
This type of approach is a natural fit for a firm like Great Point Capital. Given that we exist to service the most currently active traders, we are well equipped to handle the technology and speed of execution necessary to implement a quantitative strategy. We can support systems that trade frequently or only at specific times and over any holding time frame necessary, intraday to long term. At Great Point we do not hire our own quantitative developers to engineer strategies for our firm, but rather we bring in and support quantitative teams with the capital and technology that they need to trade for themselves. We invite all successful quantitative traders to reach out and see if it would make more sense for them to team up with a firm like ours, instead of working for a salary and bonus that represents only a small portion of the economic gains that their quantitative strategy has created.
Even if you are simply developing models with the aspirations of one day joining a quantitative firm, Great Point Capital can be a great platform on which you can get your models up and running and expand from there. We can offer low startup costs to get your project connected to live markets.
There is no doubt that quantitative trading has been a growing and successful approach to stock trading. The inherent discipline, speed, and depth of considerations that can go into every trading decision is an incredibly powerful combination. Not to mention that computer models can monitor and observe market activity in ways that human beings will never be able to.
Great Point Capital is very excited about the opportunities in this space. We look forward to reviewing ideas from quantitative developers from all over the country and hope to form some of the best quantitative teams that are trading with our firm for primarily their own gain. We look forward to allocating resources to quantitative teams to empower them to make their strategies more productive and more rewarding for themselves.