As the term suggests, quantitative finance involves the use of mathematical models, statistics, and computational algorithms to analyse financial markets and securities. It is primarily used to identify trading opportunities, optimise portfolios, and manage risk and price derivatives.
Before we discuss low latency execution in more detail, it’s important to understand the term latency. In its most basic form, latency is the delay between a user passing an instruction and that instruction reaching its destination before being executed. In the world of cutting-edge investment and trading, every millisecond helps.
Whatever type of investment you are considering, it all boils down to one thing: risk and reward. This is where risk tolerance comes into play – in essence, the amount of risk you’re willing to take to achieve your investment goals. In this article, we will consider different types of risk tolerance and how they can change over the years. As with anything related to investment markets, nothing stays the same forever!
Recently, we have seen a significant increase in demand for corporate bonds as investors look to secure relatively high income streams and a safe home for their capital. It can be challenging to look ahead, as we saw with the US Federal Reserve recently suggesting there may just be one interest rate reduction this year, against initial hopes of six at the start of the year. This perfectly reflects how important it is to be aware of factors that move corporate bond prices and how you can safeguard your capital.
As an investor, it’s important to inject a degree of reality into your investment decisions and be able to spot what are commonly known as red flags. There are numerous different types of red flags, which are very often easy to spot in hindsight – perhaps not so easy in the moment!
While FinTech tends to grab the investment headlines, there is an ongoing revolution in smart agriculture technology. Even though huge improvements in agricultural techniques have already been identified and implemented, many believe we are only scratching the surface of the potential, especially in the APAC region.
To many people, FinTech is a modern concept that emerged as a consequence of the Internet. However, the reality is very different. FinTech’s origins can be traced back to the 1850s – yes, the 1850s!
It is no secret that technology now plays an integral part in investment strategies and even the process of placing orders. This has led to increased demand for quantitative investment strategies, which rely heavily on mathematical and statistical models to make unbiased investment decisions. In theory, these investment strategies are relatively straightforward, but they require intense computing power and statistical data in practice.
The introduction of distributed ledger technology (DLT), with the most common variation known as blockchain, could be the ultimate financial disrupter. This technology feeds into the cutting-edge technology provided by FinTech companies and is likely to change the way we trade and hold assets.
The global futures and options market has grown considerably over the last 50 years and, in many cases, created situations where the “tail is wagging the dog”. The power and influence of these markets are enormous, and while often accused of fuelling speculation, there are ways in which you can use these instruments to protect your portfolio.