Decoding Alpha: Where Data Science Meets Wall Street.
You can use visual inspection, global vs. local analysis, and statistics to analyze stationarity. The Augmented Dickey-Fuller (ADF) test is the most commonly used parametric test, and the Zivot-Andrews test is better than the ADF at detecting stationarity through structural …
Whether you’re a retail trader looking for additional capital or a smart student looking for a fantastic firm, we’ve got you covered. We reached out to 300+ retail traders who passed trading challenges to get their thoughts on each firm. …
Stationarity means that a process’s statistical properties that create a time series are constant over time. This statistical consistency makes distributions predictable enabling forecasting, and is an assumption of many time series forecasting models. What Is Stationarity? In mathematics and …
Proprietary trading occurs when a trader trades stocks, bonds, commodities, and other financial instruments with a firm’s own money. Traders who make these types of traders are often called prop traders, short for “proprietary traders”. Prop Traders often use advanced …
Dark pools are an alternative trading system (ATS) that allows institutional investors to conduct massive trades without disclosing details on the public exchange unless executed. They are legal and regulated by the Securities and Exchange Commission under Regulation ATS of …
Time-weighted average price (TWAP) calculates the weighted average price of the security over a particular time period. TWAP is often implemented as an order execution strategy to execute massive trades by breaking them into equal parts over a trading period …
Volume Weighted Average Price (VWAP) is the average trading price of an asset throughout the day using price weighted by volume. It provides traders an insight into the price trend where volume is highest. Institutions and traders use VWAP to …
ETF Arbitrage is a strategy through which traders earn a profit by exploiting the price discrepancy between an ETF and its underlying assets or related securities. This process eventually results in an equilibrium price as the ETF shares’ value converges …
Due to poor investment timing, the average stock investor trails the market’s performance. The psychological forces of missing out (FOMO) are strong but lead to weak investment returns. An intelligent investor can utilize ETF fund flows to help time the …
Volatility Arbitrage is a form of statistical arbitrage used in options trading. This trading technique exploits the difference between an option’s implied volatility and the underlying asset’s actual volatility. Vol Arb is usually implemented in a delta-neutral portfolio that includes …
