Quantitative Trading Strategies Rule, VIX Up 9%

Spastic market action partly reflects the disproportionate role of high-frequency-trading funds, says Doug Kass of Seabreeze Partners Management.  In his latest lob against quantitative trading strategies, AKA the Quants, Kass says

“The very nature of price momentum trading strategies is serving to dramatically exaggerate market price movement, while talking heads try to relate them to fundamental developments and news (especially of a euro kind) and/or margin calls. Hedge Funds are sitting on their hands, and … so are individual investors … but the high-frequency-trading funds are very active and have taken the role as the dominant investor in the U.S. stock market. “

Meanwhile, the Chicago Board Options Exchange’s Volatility Index (VIX) was up 9%, a day after rising 36% as the market catapulted lower.

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2 Responses to Quantitative Trading Strategies Rule, VIX Up 9%

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