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Competitive Edges in Algorithmic Trading
by Nitesh Khandelwal, Co-founder, QuantInsti & iRage
Introduction
What’s an edge? Some examples
Types of trading strategies
Edges in the world of trading
Relevant edges for different types of strategies
Q&A
Agenda & Session Objectives
About QuantInsti
Research & Trading Platform
with complete integration to
the learning platforms.
EPAT
World’s leading verified certificate
course in Algorithmic &
Quantitative Trading
Machine-enabled & self-paced
learning platform with 50+
courses & learning tracks
3M+ 300+ 1.5M
HOURS CONTENT
CONSUMED
ANNUALLY
CORPORATE PARTNERS
ACROSS 20 COUNTRIES
USERS CONSUMING
CONTENT EACH YEAR
100+
TEAM MEMBERS &
FACULTIES
190+
COUNTRIES HAVE
QUANTINSTI USERS
$6B+
PAPER TRADING
VOLUME ON BLUESHIFT
Enabling the world for Systematic Trading & Investments
What’s a competitive edge?
A competitive edge
Competitive edge: Examples
Algorithmic trading
Investment
/
Trading
Style
Strategy types
Underlying Trading View / Factor
Quant Momentum (time-
series or cross-
sectional)
Pair-trading,
most types of
statistical
arbitrage
Advanced
models (e.g.
HMM, regime
switching)
HF Market-
making, Cash-
futures arbitrage
News-based
automated
trading
Technical MA crossover,
Continuation
patterns
Swing,
Retracement,
Pivot trading
Opening range,
dual thrusts,
patterns
Range-based
short gamma
(vol selling)
Limited use
cases
Fundamental Factor-based
investing
Value investing Value/RV
(relative value)
strategies)
Cross-asset,
cross country
RV / short
gamma
Usually
discretionary
Trending Mean-reverting Break-out Carry Event-based
Competitive Edges in Trading
Competitive Edges
01
Speed
Colocation, Data Centers,
Network/Hardware infrastructure, Algo
Trading System
03
Strategy infrastructure
Research lab, Back-testing engine, Time
from idea to live, Pricing algorithms/models
02
Market/Alternate Data
04
Information/News
Access to information, faster
reception/processing of news & information
05
Backoffice/Risk
Risk management tools, Risk
evaluation/mitigation models
06
Funding cost & taxation
Low cost of funding, Access to clients/funds,
Speed of fund access matters!
Data sets, Proprietary data, Exclusive data
Access to markets
Access to trading destinations, liquidity,
preferential market microstructure
People & Knowledge
Skills, Dedicated team
Intellectual property
Strategy, Hardware, Software, Process
knowhow
07 08 09
Edges for different strategies
Relook: Strategy types & edges
Q&A
Complete
Webinar Recording

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Competitive Edges in Algorithmic Trading

  • 1. Competitive Edges in Algorithmic Trading by Nitesh Khandelwal, Co-founder, QuantInsti & iRage
  • 2. Introduction What’s an edge? Some examples Types of trading strategies Edges in the world of trading Relevant edges for different types of strategies Q&A Agenda & Session Objectives
  • 3. About QuantInsti Research & Trading Platform with complete integration to the learning platforms. EPAT World’s leading verified certificate course in Algorithmic & Quantitative Trading Machine-enabled & self-paced learning platform with 50+ courses & learning tracks 3M+ 300+ 1.5M HOURS CONTENT CONSUMED ANNUALLY CORPORATE PARTNERS ACROSS 20 COUNTRIES USERS CONSUMING CONTENT EACH YEAR 100+ TEAM MEMBERS & FACULTIES 190+ COUNTRIES HAVE QUANTINSTI USERS $6B+ PAPER TRADING VOLUME ON BLUESHIFT Enabling the world for Systematic Trading & Investments
  • 8. Investment / Trading Style Strategy types Underlying Trading View / Factor Quant Momentum (time- series or cross- sectional) Pair-trading, most types of statistical arbitrage Advanced models (e.g. HMM, regime switching) HF Market- making, Cash- futures arbitrage News-based automated trading Technical MA crossover, Continuation patterns Swing, Retracement, Pivot trading Opening range, dual thrusts, patterns Range-based short gamma (vol selling) Limited use cases Fundamental Factor-based investing Value investing Value/RV (relative value) strategies) Cross-asset, cross country RV / short gamma Usually discretionary Trending Mean-reverting Break-out Carry Event-based
  • 10. Competitive Edges 01 Speed Colocation, Data Centers, Network/Hardware infrastructure, Algo Trading System 03 Strategy infrastructure Research lab, Back-testing engine, Time from idea to live, Pricing algorithms/models 02 Market/Alternate Data 04 Information/News Access to information, faster reception/processing of news & information 05 Backoffice/Risk Risk management tools, Risk evaluation/mitigation models 06 Funding cost & taxation Low cost of funding, Access to clients/funds, Speed of fund access matters! Data sets, Proprietary data, Exclusive data Access to markets Access to trading destinations, liquidity, preferential market microstructure People & Knowledge Skills, Dedicated team Intellectual property Strategy, Hardware, Software, Process knowhow 07 08 09
  • 11. Edges for different strategies
  • 13. Q&A