Algorithmic Options Trading 3

In this article we’ll look into a real options trading strategy, like the strategies that we code for clients. This one however is based on a system from a trading book. As mentioned before, options trading books often contain systems that really work – which can not be said about day trading or forex trading books. The system examined here is indeed able to produce profits. Which is not surprising, since it apparently never loses. But it is also obvious that its author has never backtested it.  Continue reading “Algorithmic Options Trading 3”

Hacking a HFT system

Compared with machine learning or signal processing algorithms of conventional trading strategies, High Frequency Trading systems can be surprisingly simple. They need not attempt to predict future prices. They know the future prices already. Or rather, they know the prices that lie in the future for other, slower market participants. Recently we got some contracts for simulating HFT systems in order to determine their potential profit and maximum latency. This article is about testing HFT systems the hacker’s way. Continue reading “Hacking a HFT system”

Get Rich Slowly

Most trading systems are of the get-rich-quick type. They exploit temporary market inefficiencies and aim for annual returns in the 100% area. They require regular supervision and adaption to market conditions, and still have a limited lifetime. Their expiration is often accompanied by large losses. But what if you’ve nevertheless collected some handsome gains, and now want to park them in a more safe haven? Put the money under the pillow? Take it into the bank? Give it to a hedge funds? Obviously, all that goes against an algo trader’s honor code. Here’s an alternative. Continue reading “Get Rich Slowly”