Codeless Quant Strategies

In a hedge fund, a prop trading desk or any high geek power trading environment, there is a chaos that is by now familiar. It is hard to imagine a world in which PhDs in physics, mathematics and statistics are not translating mathematical strategies into scripts and code libraries; where IT developers are not integrating them with the rest of the backoffice environment; where IT is not exerting time and energy to connect to and clean real time data; and where quants are then not testing and tweaking the model on simulated data sets.

All this takes several months and that’s just to get a strategy approved. Next orders have be generated and executed, and that starts a whole new batch of work and stress: IT connecting back-end systems to order and execution management systems, middle office scrambling to make sense of risk, and quants chewing their nails about when the market will change and the model will have to be updated. The days when a strategy was a long-term alpha laying golden goose are over. Nowadays, a strategy is good on average for about 6 months till the market catches up, and lo and behold, the whole process starts all over again.

FAST FORWARD!!!

A platform exists that automates all parts of the workflow outlined above. It can handle and translate known datasets like Bloomberg, and Reuters, not to mention real-time low-latency tick feeds; it has a library of thousands of well-known mathematical models with which a quant can build any kind of factor based model, creating these models through drag and drop visual interfaces; it allows users to test this model on data sets (past, present and simulated future); and finally, it connects directly to an order management system. All this should take a couple of weeks! It might sound as close to reality as Virgin Galactic, but mind you, both are not as far off as they seem. And quant platforms that are codeless - allowing visual plug n’ play creation of alpha-generating strategies – and have a seamless workflow from market data source to trade execution, i.e. comprise a true straight through processing solution – are here today!

Aite Group published a report “The World According to Quants: Enter Alpha Generation Platforms" in July this year, which first brought some innovative and cutting edge new companies to the forefront. These include Alphacet, Deltix, and ClariFi, and 4th Story.

Their platforms are definitely worth checking out:

Alphacet: http://www.alphacet.com
Deltix: http://www.deltixlab.com/
ClariFI: http://www.clarifi.com/
4th Story: http://www.4thstory.com/

It’ll soon be time to update the Quant job requirement with “no coding experience necessary.”