We came across a number of items today on the topic of quantitative investing and high frequency trading today that did not fit in the linkfest.  We can’t say there is a unifying theme between them but we thought they would be of interest to our readers.

A story from Reuters by Phil Wahba and Emily Chasan on the changing sociology of trading on Wall Street.  They focus on how trading has gone from being a world of “alpha males” to now being dominated by introverts focused on the technology of high-speed trading.

Jonathan Spicer and Herbert Lash also at Reuters highlight the goings on at a high frequency trading start-up and note how much of the anxiety about HFT is a function of rapidly changing business models.  They note how the low barriers to entry and need for secrecy make these firms easy targets.

Robert Litterman of Goldman Sachs Asset Management in comments to a conference noted how quants need to change their models to succeed in this new era.   The story from Reuters also comments from Dealbreaker and Zero Hedge.

Along those lines Thomson Reuters announced that they are making company news available to trading firms in machine readable form.  More from Finextra and InvestmentNews.

We also wanted to note a newish academic paper that is ripe for exploitation by quantitative traders who are testing non-quantitative data.

A paper by Loughran and McDonald entitled “Barron’s Red Flags: Do They Actually Work?” at SSRN studies how certain phrases in company reports represent “red flags” and help predict lower future returns and higher volatility.

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