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QUANTITATIVE FINANCE Computational finance or financial engineering is a cross-disciplinary field which relies on mathematical finance. practitioners of quantitative finance aims to precisely determine the financial risk that certain financial instruments create. hedging and investment decisions. Utilizing various methods. numerical methods and computer simulations to make trading. . as well as facilitating the risk management of those decisions.
Quant Analyst The Quant Analyst often have an excellent knowledge of Maths/Physics/Computational Finance combined with strong programming skills (Visual Basic. traders. C++. under NT/Unix). . They build the analytical models. sales or analysts. whose output is used by clients.
Quant Analyst Responsibilities Responsible for the development and deployment of new analytics and models pertaining to the Business. . Implementation of the prototype models developed with QR. Develop new financial analytics functions using advanced mathematical skills and business knowledge to support QR’s need to analyze new products. Responsible for helping to architect real-time trading systems across multiple products and functions. Portfolio Managers and Traders. enhance risk mgmt. and or pricing functionality. Provide application and analytics support to Quantitative Researchers.
Adding value by providing customised algorithms for clients. Programming ranges from SAS/Matlab to C#/C++ or Java.Algorithmic Trading Developing advanced algorithms that go far beyond basic models to seek out liquidity in illiquid and fragmented exchanges and dark pools. involving statistical analysis of high frequency market tick data. Developing pre and post trade analytics to assess performance and estimate market impact. depending on the firm and the role. and working with traders to advise clients on optimal algorithms. .
processing.Pros of Algorithmic Trading Adaptable: Providing high speed transmission of market data and transaction messages to other applications and users Offering a vendor-agnostic platform that is able to accept and distribute data from any market data vendor Having pre-integrated security and monitoring for both compliance and cost-effective operations Streamlined: Ensuring optimized acquisition. flexible. Open architectures enable companies to build loosely coupled. and data and file formats. and reconfigurable solutions . and delivery of market data through an efficient and integrated platform Reliable: -Enabling continuous delivery of market data with the robustness to support the needs of the front-office Open Architecture: Promoting interoperability by using open published specifications for Application Program Interface (APIs). protocols.
then these algorithms are liable to be ‘reverse engineered’. . But if the trader didn’t select the most optimal algorithm for that trade little can be done. algorithms are acting on other algorithms. Algorithms can not compete with the ability of the human brain to react to unanticipated changes and opportunities. Here. measure its pre-trade analytics and see how the post-trade results match up to that expectation. tracked with the use of algorithms.Cons of Algorithmic Trading Lack of Visibility We know what a specific algorithm is supposed to do. Algorithms Acting on Other Algorithms If fund managers’ trading pattern is spotted and regular. This problem is caused by a lack of visibility and transparency into the algorithm while it is executing orders. Missing Ingredient—The Trader’s Gut Feel Algorithms are simply advanced trading tools and they cannot replace the human elements or make interaction redundant. This implies that their buy and sell orders are pre-empted and used to the maximum effect by their competitors.