Economist Article On Quant Funds
The media seems to bring an endless fascination amongst quant funds. Here is the latest article from the Economist magazine, summarizing the postmortem published yesteryear several researchers. (Hat tip, in 1 lawsuit again, to reader Mr. J. Rigg.)
The telephone substitution points are equally follows:
1) Quant funds are immediately becoming the mind marketplace makers inwards many securities, which commonly would render liquidity as well as decrease volatility.
2) Unlike ordinary marketplace makers, however, quant funds are highly leveraged.
3) Because of the high leverage, inwards the confront of large losses these market-making quant funds are forced to liquidate their assets instead of buying them, hence behaving inwards a mode contrary to ordinary marketplace makers simply when the involve for liquidity is direst.
4) Thus quant funds are truly contributing to instability of the marketplace despite their apparent market-making function.
Fortunately, when all else has gone wrong, at that spot is alway Mr. Bernanke to count on ...
The telephone substitution points are equally follows:
1) Quant funds are immediately becoming the mind marketplace makers inwards many securities, which commonly would render liquidity as well as decrease volatility.
2) Unlike ordinary marketplace makers, however, quant funds are highly leveraged.
3) Because of the high leverage, inwards the confront of large losses these market-making quant funds are forced to liquidate their assets instead of buying them, hence behaving inwards a mode contrary to ordinary marketplace makers simply when the involve for liquidity is direst.
4) Thus quant funds are truly contributing to instability of the marketplace despite their apparent market-making function.
Fortunately, when all else has gone wrong, at that spot is alway Mr. Bernanke to count on ...
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