Algorithms Probably Caused a Flash Crash of the British Pound

Overnight, the British pound dropped by 6 percent, to $1.13. Analysts are pointing the finger at an increasingly familiar financial scapegoat: the algorithm. Though the crash hasn’t yet been definitively linked to algorithmic trading, the Economist argues that the speed of last night’s drop points at software gone haywire. (MIT Technology Review) read more


Renaissance Technologies Explained

Renaissance Technologies is an East Setauket, New York-based American investment management firm founded in 1982 by James Simons, an award-winning mathematician and former Cold War code breaker, which specializes in systematic trading using quantitative models derived from mathematical and statistical analyses. Renaissance is one of the hedge funds using quantitative trading — known as “quant hedge funds” — that rely heavily on powerful computers and sophisticated mathematics to guide investment strategies. (Everything Explained Today)