Essential concepts for quant trading, research, and interviews — explained clearly.
40
Concepts
7
Categories
4 concepts
High-frequency trading uses ultra-fast technology and algorithms to execute large numbers of trades in fractions of a second, profiting from tiny price discrepancies and market microstructure.
Statistical arbitrage (stat arb) uses quantitative models to identify and exploit temporary pricing inefficiencies between related securities, typically holding diversified portfolios of long and short positions.
Pairs trading is a market-neutral strategy that simultaneously goes long one security and short a correlated one, profiting when the price spread between them reverts to its historical mean.
Mean reversion is the tendency of asset prices, returns, or other financial metrics to move back toward their long-term average after deviating significantly, forming the basis for many systematic trading strategies.
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