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I am sure that there's long term investors that though those pesky day traders were scum. And yet, here we still are. HTF does not implicitly mean cheating, although no doubt some firms push the boundaries. I think you are in danger of throwing the baby out with the bathwater,

I don't develop software - I have other people do that for me. In fact, a lot of the people that develop software for me are far more intelligent than me on paper. Saying that, there is no chance they will ever run a company. They have a fundamental disconnect between the theoretical and real...

Yes - but could they trade as well as a cockney lad who left school at 18 and who's first car was an XR3i convertible with go faster stripes ? Probably not. You fall foul of the myth that it takes smarts to trade. Of course it takes some smarts but then again, no more than it takes to...

I agree :D Good discussion though.

Actually, I understand how science works. I understand that science could not come up with a masterpiece like Da Vinci. I understand that a Physics Phd couldn't run a fruit and vegetable stall like a 50 year old cockey 'barrow boy'. I understand that neither a biologist or chemist could...

I think we can safely say that quants should not be used to help create and maintain models to price derivatives. We can say that based on the real life experience and the outcomes of people relying on their models. If you maintain that this is all quants do (and I do not agree with...

If you use Black-Scholes to price options and then make adjustments for the prices you don't like - then you are not using Black-Scholes. To illustrate the point, let's work on a fictional concept we shall call "FPM" - or "Fair Penis Measurement". Let's say I produce my FPM by following...

Actually - none of this really has any bearing at all on how difficult trading is/isn't. It does have a great bearing on many retirees though, for whom I do have a lot of sympathy.

Spot on with point 2 & 3. I still have an issue with point 1, especially when people go around winning Nobel prizes for flawed mathematical theories. You can't blame someone with a Phd in physics for taking a 6 figure salary for an investment house. Can we at least have quants take equal...

EXACTLY.

Once again, putting words into my mouth. When I say Quants are misguided, I am not by definition absolving anyone else. Of course people were complicit BUT the issue runs deep into the heart of the Business Schools and the fact that they have been hijacked into teaching finance as a...

Quite.... Mind you - there have been years when I'd have murdered for a 1.46% gain... :)

Nope - I don't disagree with any of that. I agree with all of it except the part about complicity. When Moodys rated a derivative AAA, I don't think the buyers of the derivatives understood the risks they were taking, although I may be wrong.

Nope - I run a software company, we produce programming languages, forecasting models and simulations for planning purposes. I'm at home today as it's a slow day so I thought I'd annoy some people on line with my opinions of my peers in the financial world :p I promise I'll stop when the...

You seem to have a habit of trying to put words into my mouth. Options have been around for years, long before Black Scholes. at no point did I say they havent. Right now, we still have a vibrant options market in which Black Scholes does not dictate the option prices. Perhaps you can show where...

Indeed - it's the one's that win the Nobel Prize that cause the most havoc. I didn't say I don't like quants. I just think they should be shot for the benefit of mankind.

Once again, we are back to 'computer code'. I have not at any point blamed computers. This is a people problem. The initial concept of portfolio insurance was to REPLICATE the performance of a put option in what was referred to as a “dynamically programmed system,” where a client was...

Pits ? Quant Trading ? This has nothing to do with the issue. Quants don't trade (which I suspect is part of the problem) - but they do put together risk profiles that financial institutions rely on. That's what is causing the mayhem. If they kept Quants busy trading, we wouldn't...

Of course crashes will still occur without quants - but the problems we have now are so very much worse because of quantitative analysis. As for seeking something ? What makes you think I am seeking anything ? What makes you think this has any thing to do with pit trading vs electronic...

You don't need to trade 'against' anyone. The market isn't out to get any one participant however much it may feel that way. Some institutions (e.g. ETFs) have to buy/sell stocks REGARDLESS of the profit on the trade. There's a whole host of people trading in different directions for different...