31–40 of 104 posts
This is quite a change from when they ruined a man’s life for using Github.
https://arstechnica.com/tech-policy/2009/07/goldmans-secret-...
Of course, if this technology was able to price securities better than the market (the fundamental job of almost every market participant), it would be printing money and they would not release it. This is not the secret sauce, but probably an implementation of a set of standard well known pricing and risk models. That's still useful, and can be expensive to develop, so thanks Goldman.
Not true. You might make an argument that this is the effect of having them together in a market, but that's not their job:
- Market maker: hang around the market offering to trade with anyone (pref retail) at a spread. Doesn't care whether TSLA is gonna be able to make all those Model 3s.
- Pension fund: make sure they can pay the liabilities that are coming due. If that can be locked in, happy to pay a bit more than fair value to do so.
- Hedge fund: make absolute returns. Buy before it goes up, sell before it goes down. Whatever form of voodoo (or skill) fulfills this is fine. This doesn't have to mean finding the right price (could just mean you guess which way it's going), though of course often it is part of the objective.
- Broker: finds people on both sides of a trade. Doesn't care terribly much except to create excitement.
- Banks: lend money/securities and offer services to all of the above. Create research to make people trade. Securitise stuff so people can trade it. Often do a bit of everything.
Source: used to run hedge funds.
Of course, if this technology was able to price securities better than the market (the fundamental job of almost every market participant), it would be printing money and they would not release it. This is not the secret sauce, but probably an implementation of a set of standard well known pricing and risk models. That's still useful, and can be expensive to develop, so thanks Goldman.
Investment banks don't even have the secret sauce, hedge funds like Renaissance Technologies and D. E. Shaw & Co. are the ones that have it
At the time of Aleynikov's case, Goldman was routinely at the top of the NYSE rankings with regard to programmatic trading volume.
Earlier quoted context omitted.
Investment banks have proprietary trading desks that are effectively hedge funds.
I don’t think this is accurate. Regulators release the Volcker Rule to shut down prop trading at banks.
Earlier quoted context omitted.
I don’t think this is accurate. Regulators release the Volcker Rule to shut down prop trading at banks.
There still exist principal investing groups, as well as market making groups that can contribute to the bottom line.
Of course, if this technology was able to price securities better than the market (the fundamental job of almost every market participant), it would be printing money and they would not release it. This is not the secret sauce, but probably an implementation of a set of standard well known pricing and risk models. That's still useful, and can be expensive to develop, so thanks Goldman.
> the fundamental job of almost every market participant Not true. You might make an argument that this is the effect of having them together in a market, but that's not their job: - Market maker: hang around the market offering to trade with anyone (pref retail) at a spread. Doesn't care whether TSLA is gonna be able to make all those Model 3s. - Pension fund: make sure they can pay the liabilities that are coming d…
That being said, most of your definitions are still dependent on competitively pricing securities. A market maker who can't calculate reasonable theos won't be a market maker for long.
Earlier quoted context omitted.
> the fundamental job of almost every market participant Not true. You might make an argument that this is the effect of having them together in a market, but that's not their job: - Market maker: hang around the market offering to trade with anyone (pref retail) at a spread. Doesn't care whether TSLA is gonna be able to make all those Model 3s. - Pension fund: make sure they can pay the liabilities that are coming d…
I think you're missing the gist of his statement and also overlooking the word "almost"? That being said, most of your definitions are still dependent on competitively pricing securities. A market maker who can't calculate reasonable theos won't be a market maker for long.
No, the MM doesn't care if TSLA is overpriced. He just sees where everyone is and makes a market roughly there.
> You can't provide quotes if you don't have something to quote around.
But you don't have to quote around the actual value of the item. That's the point.
Earlier quoted context omitted.
I think you're missing the gist of his statement and also overlooking the word "almost"? That being said, most of your definitions are still dependent on competitively pricing securities. A market maker who can't calculate reasonable theos won't be a market maker for long.
> most of your definitions are still dependent on competitively pricing securities No, the MM doesn't care if TSLA is overpriced. He just sees where everyone is and makes a market roughly there. > You can't provide quotes if you don't have something to quote around. But you don't have to quote around the actual value of the item. That's the point.