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Did The World's Biggest Hedge Fund Just Go "All In" On HFT And Dark Pools?

Tyler Durden's picture




 

Is the world's biggest hedge fund going all-in on HFT and Dark Pools? We ask because Ray Dalio's Westport, CT-based Bridgewater, which at last check manages around $160 billion between its Pure Alpha and All Weather fund products, and which according to preliminary data had a solid performance in 2014, has just hired Jose Marques, the former global head of the quant and algo-heavy electronic trading at Deutsche Bank, to become Bridgewater's new head of trading.

As the WSJ, which broke the story, reports Marques left Deutsche Bank in November.

And as those who followed the surprising power plays involving the leadership of the HFT-favorite BATS exchange will recall, he had been a candidate to become president of BATS/DirectEdge - the HFT industry's preferred stock exchange where he also served as a board member - but where the job was in the last minute given in November to Chris Concannon, former head of the "Holy Grail" high-frequency trading firm Virtu Financial LLC. Marques was supposed to replace William O'Brien "who was forced out of BATS in July amid cultural differences and a decision by BATS to settle allegations that one of its units gave improper advantages to high-speed traders" after he was schooled, and caught lying on primetime TV by Michael Lewis' young protagonist Brad Katsuyama.

What is surprising is that as the WSJ adds, at Deutsche Bank, Mr. Marques oversaw the firm’s electronic trading operations which included the operation of its dark pool.

So, one wonders: is the very macro-heavy Bridgewater branching off into unknown territory, and will it be putting the skills of an HFT and dark pools expert to use in the coming months?

We are sure to find out shortly, especially if the market begins to act even more weird than usual.

For all those wondering just how many business, finance or trading degrees one needs to get what may be the most coveted trading job in the world, the answer is zero: Marques has a Ph.D. in physics from University of California-Irvine. Previously he held senior electronic trading roles at Goldman Sachs Group Inc., Morgan Stanley and Credit Suisse Group AG.

In other words, by hiring Marques, Bridgewater will now have intimate knowledge of not only every aspect of HFT-trading as it takes place in the most heavily HFT-trafficked exchange, but also the operations of the four of the biggest dark pools in the world.

Something tells us High Frequency Trading, and scalping, and frontrunning, is about to become a whole lot less profitable for everyone else, except for Ray Dalio...

 

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Wed, 01/07/2015 - 20:21 | 5635135 Latina Lover
Latina Lover's picture

In the USSA, the best PHD's in physics work for banksters.  In Russia and China, they stay in the sciences or go military.

This is how America loses, bitchez.

Wed, 01/07/2015 - 20:32 | 5635159 knukles
knukles's picture

Ah, to be in Quantum Land, now the Classicists are Here

Wed, 01/07/2015 - 20:49 | 5635208 kaiserhoff
kaiserhoff's picture

Is it just me, or is that whole algo elevator levitation magic beans trade,

  looking a little crowded?

Wed, 01/07/2015 - 21:54 | 5635382 KnuckleDragger-X
KnuckleDragger-X's picture

When your in a gunfight in a dark room it helps to have a gun. The second thing is how you use it and that is the real question.

Thu, 01/08/2015 - 00:53 | 5635856 long-shorty
long-shorty's picture

yeah, I kind of doubt this is sinister. it is hard to trade almost anything these days without getting a terrible fill. Bridgewater moves a lot of stock in and out and probably just wants to be sure they do it with the least slippage possible. if I could afford to poach the best trader I know and get him to work for me in-house, I would do it in a heartbeat.

Wed, 01/07/2015 - 22:51 | 5635537 MASTER OF UNIVERSE
MASTER OF UNIVERSE's picture

Whilst getting my degree in Experimental Psychology at Carleton University I decided to look for a part time job on-campus to survive

costs and came across a requirement for someone formally trained in metrology for a Particle Physics Design Group that was manufacturing the ARGUS Microvertex Particle Detector to be delivered to CERN Geneva for the Large Hadron Collider experiment. In brief, I had to train

the entire Herzberg High Energy Physics Department Physicists and PEng for the ARGUS Design Group how to measure down to half a micron accurately. Anyhow, as a Mechanical Engineering Technician

I could not believe how uneducated Physicists and PEng Mechanical Engineering colleagues were in terms of metrology basics at the level required for Particle Physics experimentation. Quantum Physics and Quantum Mechanical Engineering is the only game in town IMHO. We are definately in on some interestings times with HFT, but as you know, that is a Chinese curse. Moreover, if Wall Street is hiring Physicists I hope they understand how absentminded they are and that they are not as bright as they appear to be on paper.

Thu, 01/08/2015 - 00:50 | 5635853 long-shorty
long-shorty's picture

they are counting on them to be somewhat oblivious to the fact that the physicists are earning $120k while the guys putting it all together as a trading system are making 7-8 figures.

Thu, 01/08/2015 - 02:43 | 5635978 Nobody For President
Nobody For President's picture

MOU - a greenie for 'Whilst' - DAMN that is a great word.

Thu, 01/08/2015 - 09:52 | 5636512 Grinder74
Grinder74's picture

Don't feel bad.  Yesterday, I had to explain to a "senior portfolio manager" how a total return equity swap worked.

Wed, 01/07/2015 - 22:20 | 5635458 Freddie
Freddie's picture

Most weapons systems, military jets, missiles, ECM jamming etc is software based.  The Russian stuff is very very good.   

Wed, 01/07/2015 - 20:26 | 5635146 world_debt_slave
world_debt_slave's picture

OT: free at last! Adblock Plus, no more annoying ads!

https://adblockplus.org/

 

that is all

 

Wed, 01/07/2015 - 20:35 | 5635166 knukles
knukles's picture

You'll probably miss the good old Thai Trannies looking for Rich American for Marriage and Childrearing or Grinder personal advets.
Believe me, it gets sooooooo boring without the "good stuff"

Wed, 01/07/2015 - 20:50 | 5635209 Consuelo
Consuelo's picture

The Chinese lady ads are always pleasing eye-candy.    The one I still scratch my head over is the 30 year-old homeless guy wearing shades and a hoody, whilst holding a skateboard.    Ah Marketing...

Wed, 01/07/2015 - 21:55 | 5635390 KnuckleDragger-X
KnuckleDragger-X's picture

I run a lot of security on my browser and turned it all off once to see what the bitching was about and let me just say OH HELL NO!!!!

Thu, 01/08/2015 - 00:35 | 5635821 mc888
mc888's picture

Ok I just tried the same thing. Always wondered why so much whitespace on the sidebars! :p

Wed, 01/07/2015 - 20:46 | 5635202 bustdrs
bustdrs's picture

cept it wont download on new Macbook Air!

Desktop fine. Annoying.

Thu, 01/08/2015 - 05:10 | 5636050 giovanni_f
giovanni_f's picture

APPLE. SUCKS.

Wed, 01/07/2015 - 20:29 | 5635154 Glass Seagull
Glass Seagull's picture

 

 

USA! USA! USA!

USA! USA! USA!

USA! USA! USA!

USA! USA! USA!

Wed, 01/07/2015 - 22:14 | 5635446 Freddie
Freddie's picture

Ray don't do it.   30+ years of a very good reputation could be destroyed hiring scum like this.

Wed, 01/07/2015 - 20:31 | 5635155 buzzsaw99
buzzsaw99's picture

the new manhattan project. phds trying to blow up the world part two.

Wed, 01/07/2015 - 20:50 | 5635212 NotApplicable
NotApplicable's picture

Funny how nature do that.

Wed, 01/07/2015 - 20:39 | 5635165 Stained Class
Stained Class's picture

Say what you will, Ray Dalio just rescued the next suicided banker. Are you kidding? This is a masterstroke! UNFKNBLVBL. What this guy knows is worth more than all the tea in China, er, gold in China. Whatever, Dalio is the new Bill Gross. This is a big fucking deal, I hope Tyler looks at this again and sees it as such. This is HUGE.

Wed, 01/07/2015 - 23:13 | 5635612 Freddie
Freddie's picture

Gross is a bonds guy and Gundlach is probably better than Gross at this point. 

Dailio is pretty much without peer in the hedge fund world based on his long track record. 

I think the only guy close is quant Dr. James Simons.   Dalio has a better reputation.  At one point, Simons was accused of having great returns in his accounts while customers returns were not good. This was back in 2009.

Wed, 01/07/2015 - 20:39 | 5635184 taketheredpill
taketheredpill's picture

Heres his interview:

 

JM Show me your trading models and order structure.

 

RD Here.

 

JM This is how much HFT is costing you each year. Hire me for 5% of that amount and i will make it go away.

Wed, 01/07/2015 - 20:42 | 5635195 Fuku Ben
Fuku Ben's picture

I'm not so sure

But I am pretty sure Joe just went all-in with this 13 year old

https://www.youtube.com/watch?v=OTT5dQcarl0

Now the question is how much outside influence from controlled opposition does ZH contain

Personally I don't believe they would even put this up and say "Posted Without Comment". But I've occasionally been surprised by them before

Wed, 01/07/2015 - 20:45 | 5635198 Possible Impact
Possible Impact's picture

"a Ph.D. in physics from University of California-Irvine"

 

Quantum Economics Theory

Schrodinger's dollar can be safe in the Bank box, and spent all at the same time.

 

Wed, 01/07/2015 - 21:19 | 5635276 noben
noben's picture

General Relativity of Economics theory allows you to:

 

- Go back in time to revisit or remake the past

- Use the Goldman-Bankfine bridge to travel to any place via subspace wormholes

- Use Blackholes of Debt on unsuspecting Clients and States

- Use the God Particle to give Mass to fiat currency

Ah, it's great to be Masters of the Universe!

Wed, 01/07/2015 - 21:58 | 5635399 KnuckleDragger-X
KnuckleDragger-X's picture

Put the cat in the box and machine gun the box but don't open the box cause you don't wanna know.....

Wed, 01/07/2015 - 20:49 | 5635204 Stained Class
Stained Class's picture

This is BIG NEWS. 

Wed, 01/07/2015 - 20:48 | 5635206 29.5
29.5's picture

I think I just figured it out. I'll create a derivative ETF financial vehicle something-or-other called BTFD. That's the stock symbol. You can buy BTFD but can't sell it. The greatest thing about it is you can buy the stock at any price during open market and I will buy the fucking dip for everyone. You can place an order at 8am and go on about your daily life and guaranteed you bought the fucking lowest dip of the day. Of course there's fees, but fucking who cares when everyone is buying the dips in unison? I'll be on CNBC in the morning. BUY BUY BUY

Wed, 01/07/2015 - 20:56 | 5635223 kaiserhoff
kaiserhoff's picture

Great idea, but you gotta have an app:

Wed, 01/07/2015 - 21:07 | 5635250 Danno Anderson
Danno Anderson's picture

I remember how good the quants were supposed to be at LTCM (Long Term Capital Management).

LTCM was founded in 1994 by John W. Meriwether, the former vice-chairman and head of bondtrading at Salomon Brothers. Members of LTCM's board of directors included Myron S. Scholes andRobert C. Merton, who shared the 1997 Nobel Memorial Prize in Economic Sciences for a "new method to determine the value of derivatives".[3] Initially successful with annualized return of over 21% (after fees) in its first year, 43% in the second year and 41% in the third year, in 1998 it lost $4.6 billion in less than four months following the 1997 Asian financial crisis and 1998 Russian financial crisis requiring financial intervention by the Federal Reserve, with the fund liquidating and dissolving in early 2000.

 

Thu, 01/08/2015 - 10:01 | 5636550 InflammatoryResponse
InflammatoryResponse's picture

Yes it should be required reading "the smartest guys in the room"  the story of LTCM or whatever the actual book title is. 

real smarts have staying power.  They had a good idea, that lasted for a while.

 

then it wasn't a good idea any more.

 

Wed, 01/07/2015 - 21:09 | 5635251 MedicalQuack
MedicalQuack's picture

Something to look at once in a while is the relationship of Cerner, the big medical records giant who just bought Siemens medical technologies.  David Cummings is who started the BATS stock exchange, from Cerner.

Here's a couple more folks that went from Cerner to BATS.

http://www.crunchbase.com/organization/bats-global-markets/insights/curr...

There's like some kind of a HFT/medical records boys club in Kansas:)  The HFT engineers cut their HFT algo writing on creating electronic medical records:)  There's a lot more heavy hitters over there now but interesting origins here. 

Wed, 01/07/2015 - 21:18 | 5635278 villainvomit
villainvomit's picture

I thougt the FED was the biggest hedgie.........

 

Hey Islam....The FEDERAL RESERVE posted a pic of Mo on it's internal e mail.........

 

and has reduced the virgin count to 71 bitchez !!!!!!!!

Wed, 01/07/2015 - 21:48 | 5635369 Atomizer
Atomizer's picture

Prints Are Available

 

A poster published this. Thought it was wicked. Click on how it works, videos.

http://tracking-point.com/precision-guided-firearms/precision-guided-semi-auto-300-wm

Wed, 01/07/2015 - 21:21 | 5635286 q99x2
q99x2's picture

This article has a title that indicates it will be referenced in the future. It is a nice title.

Wed, 01/07/2015 - 21:42 | 5635306 Atomizer
Atomizer's picture

The smell of May 6, 2010 Flash Crash in the morning. Hope the programmed robots talk with one another before the conflict ensues. Google will save the day on RSS counter newsfeeds. In the meantime, Mario Draghi will be wearing high heeled red pump shoes and dressed in his puss in boots (Le Maître Chat, ou Le Chat Botté) attire.

Wed, 01/07/2015 - 22:01 | 5635408 DipshitMiddleCl...
DipshitMiddleClassWhiteKid's picture

Dont think this Dalio guy is that much of a cheater, i could be wrong though...

 

Perhaps he wants this guy to figure out whats going to crash when the next flash crash happens..then go from there...

 

 

Thu, 01/08/2015 - 09:53 | 5636525 Grinder74
Grinder74's picture

Bridgewater?  Ha!!! There's so much funny business going on between Bridgewater and their fund services provider, BNY Mellon, that the SEC could fund themselves for 100 years with the penalties.  But then that would require the SEC to actually care about the wrongdoing of big firms.

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