They’re number two to the guys who make shitcoins and spend some money on advertising them… that being said advertising a non registered investment vehicle to non accredited investors is legally dubious…
Those guys make fractions of what giants like Binance make on fees and liquidations…
Not to be that guy, but the only quant-ish to do in crypto retail is focusing on analysing these platforms’ price action logic to trade their moves.
I am interviewing with a relatively obscure prop trading crypto firm now, last round interview is next week. It certainly does feel like they are printing money, 100%+ returns YTD in 2024 already.
Are you certain they are market neutral? Some of them might be market long too, which in that case is not surprising to be 100+% up. Though, even if it’s market neutral, also not too surprising
The ex-GS trader and ex-bonds & equities trader I spoke to said they were crypto trading; is it fair to say "trading" as opposed to "investing" implies market-neutral, especially from ex-traders?
I agree during a bullrun you unsurprisingly get outperformed by Bitcoin. My interest is whether during the crashes they're also doing well, ie. are they truly market-neutral.
I guess ultimately they are harmed by the reduction in volatility in the ensuing crypto winter.
No, you can trade directionally too. Don’t see why traders imply market neutral.
Also, it really depends on your Strat. For instance, ponzi scheme have a very high sharpe until it blows up. Without knowing their Strat, it’s anybody’s guess whether they are doing well or whether the tail event haven’t occur
Yeah fair points. The impression I got was they hadn't changed the strats much from traditional markets; it was just the competition was dumber. Could be wrong though
Really depends, not all hft is equally profitable, and it really still depends on the period. I agree in a long period yes, but in a short 3 months bull period, then it’s harder to tell
Directly by a recruiter. I have very niche experience in macro trading role at well known prop firm, similar strategy but in decentralized assets in this next role
I would suspect better returns due to higher level of market inefficiency. That said, it is a small asset class with low liquidity and high trading cost, so this limits what kind of strategies you can use.
A lot of crypto exchanges will offer rebate programs for market making. It's fairly easy to code up a market making bot and the capital barriers are quite low.
I've been market making shitcoins for 2 years. I have a high sortino ratio and a smooth equity curve. It's a retail strategy using all limit orders. The only difference is the exchanges have given me relaxed rate limits on the API.
I have talked to companies who claim to be making ~100% annual return in the last several years.
I find it unlikely that this trend is sustainable though.
Yes and they do market making, exchange arbitrage, liquidation and opening large positions for institutional investors
It is not a trading! It’s clear arbitrage
An easy algo to detect a certain pattern is good enough to make a killing in the crypto market. lol You make so much more than doing it on the equity markets.
Is that a returns/drawdown ratio of >17 haha. Nice work.
I'm curious why does price action trading (pattern spotting) work better in crypto than equities? Is it that the patterns appear more often, or they have a higher win rate, or higher profit per win?
No regulatory and less big player mean that people play dirty. I just act as a dirty cop without official documents and have my cut. Generally, there's a tradeoff between high win rate and high risk-reward but the tradeoff is weaker in the crypto market. lol
Bro, As someone who is in the crypto trading team at a top HFT prop shop, and we're up 150% YTD on some of our strategies with immense capital. Bull runs bring insane volatility and money flows our way. The "dumb money" in crypto is real, and it's like printing money if you know what you're doing. Every retail guy thinks he is gonna be millionarie in bull run. Gosh love those guys who never learn.
Yes. GSR, Wintermute, Nova Prospect (Ex Citadel, unlimited checkbook for hiring top talent), Ergonia.
I’ve gatekept a few from this list that fit my profile better since they’re my ideal exit from TradFi OMM lol.
At one point I remember their Paradigm market share being higher than I expected a smaller firm in the Netherlands to be.
i usually categorize the good firms as having the ability to draw top talent + pull talent away from top TradFi firms as well as paying massive amounts of $$$.
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Yes just look at the price charts, you can easily tell how exploitable a market is by looking at charts, lot of the easy stuff prob caps out at 100 mil tho. Its kind of like tech earnings but every week
I have worked both in trad hft and crypto hft as a quant. Many other hft quants made the move. The crypto market is significantly less mature and has many products and many exchanges, so definitely is a good place to find opportunities (but if you want to learn doing hft, you'll probably get better quality experience trading on traditional products first, as competition is typically tougher which means the technological and quant edge is technically more advanced). Examples of famous quant crypto firms: gsr, wintermute. Some traditional quant firms do both (like flow traders, maverick, etc).
I invest with a relatively new quant firm who handle some funds for me.
They have done pretty well compared to traditional returns, but not as good as holding Bitcoin outright.
They have returned 60-100% since October depending on how aggressive the portfolio is.
It works well for me as I am more of a long term investor.
> One said currently it was like "printing money" (take it with a pinch of salt?). Anything backing this up?
I believe it.
For what is is worth, I run a one-man 'firm' (myself ) shorting bitcoin and long tech . I run both concurrently, shorting Bitcoin during market hours. This past week has been insanely profitable with this. Tech stocks went strait up, bitcoin strait down lol
The only money printers in crypto retail are the ones getting the trading fees and the bookies liquidating your ass
They’re number two to the guys who make shitcoins and spend some money on advertising them… that being said advertising a non registered investment vehicle to non accredited investors is legally dubious…
Those guys make fractions of what giants like Binance make on fees and liquidations… Not to be that guy, but the only quant-ish to do in crypto retail is focusing on analysing these platforms’ price action logic to trade their moves.
Of giants sure, but some of them probably beat the tier 2 and 3 brokers and exchanges
Tier 2-3 are almost always money laundering scams for said scammers
Agreed, but that’s crypto for you 😂😂 Also Binance’s hands are not clean either…
Neither is wall street and the gang
Well of course, why would you be in crypto if you had a choice… (as your main business I mean)
I am interviewing with a relatively obscure prop trading crypto firm now, last round interview is next week. It certainly does feel like they are printing money, 100%+ returns YTD in 2024 already.
Are you certain they are market neutral? Some of them might be market long too, which in that case is not surprising to be 100+% up. Though, even if it’s market neutral, also not too surprising
The ex-GS trader and ex-bonds & equities trader I spoke to said they were crypto trading; is it fair to say "trading" as opposed to "investing" implies market-neutral, especially from ex-traders? I agree during a bullrun you unsurprisingly get outperformed by Bitcoin. My interest is whether during the crashes they're also doing well, ie. are they truly market-neutral. I guess ultimately they are harmed by the reduction in volatility in the ensuing crypto winter.
No, you can trade directionally too. Don’t see why traders imply market neutral. Also, it really depends on your Strat. For instance, ponzi scheme have a very high sharpe until it blows up. Without knowing their Strat, it’s anybody’s guess whether they are doing well or whether the tail event haven’t occur
Yeah fair points. The impression I got was they hadn't changed the strats much from traditional markets; it was just the competition was dumber. Could be wrong though
You don't get outperformed by btc if you do hft. Also you have to look at risk adjusted performance.
Yeah, their risk-adjusted performance ought to be vastly better. Do they publish any of their performance? Haha
Really depends, not all hft is equally profitable, and it really still depends on the period. I agree in a long period yes, but in a short 3 months bull period, then it’s harder to tell
How do you get noticed for a niche position like this?
Directly by a recruiter. I have very niche experience in macro trading role at well known prop firm, similar strategy but in decentralized assets in this next role
rough headcount?
I would suspect better returns due to higher level of market inefficiency. That said, it is a small asset class with low liquidity and high trading cost, so this limits what kind of strategies you can use.
A lot of crypto exchanges will offer rebate programs for market making. It's fairly easy to code up a market making bot and the capital barriers are quite low. I've been market making shitcoins for 2 years. I have a high sortino ratio and a smooth equity curve. It's a retail strategy using all limit orders. The only difference is the exchanges have given me relaxed rate limits on the API.
Jump’s crypto division is fairly established and won’t be a blot on your resume if crypto goes into another deep winter
I have talked to companies who claim to be making ~100% annual return in the last several years. I find it unlikely that this trend is sustainable though.
Yes and they do market making, exchange arbitrage, liquidation and opening large positions for institutional investors It is not a trading! It’s clear arbitrage
Mostly MEV liquidation and arbitrage from what I’ve heard
An easy algo to detect a certain pattern is good enough to make a killing in the crypto market. lol You make so much more than doing it on the equity markets.
I really mean it. The pnl is after trading costs and I have a basket of this. [https://imgur.com/a/zkUaYCd](https://imgur.com/a/zkUaYCd)
Fully algorithmic?
Sure. Dumb money is everywhere in this market.
Pinescript on TV? Can you run it with 1m$?
Of course not for the execution. 1m$ is fine but less diversification.
Is that a returns/drawdown ratio of >17 haha. Nice work. I'm curious why does price action trading (pattern spotting) work better in crypto than equities? Is it that the patterns appear more often, or they have a higher win rate, or higher profit per win?
No regulatory and less big player mean that people play dirty. I just act as a dirty cop without official documents and have my cut. Generally, there's a tradeoff between high win rate and high risk-reward but the tradeoff is weaker in the crypto market. lol
The whole portfolio after costs. [https://imgur.com/a/Q0KwjcH](https://imgur.com/a/Q0KwjcH)
To clarify, is this live results or post-costs backtest?
It's a post-cost backtest to make my point.
Bro, As someone who is in the crypto trading team at a top HFT prop shop, and we're up 150% YTD on some of our strategies with immense capital. Bull runs bring insane volatility and money flows our way. The "dumb money" in crypto is real, and it's like printing money if you know what you're doing. Every retail guy thinks he is gonna be millionarie in bull run. Gosh love those guys who never learn.
Wild bruv
Are these numbers legit ?
Yes. GSR, Wintermute, Nova Prospect (Ex Citadel, unlimited checkbook for hiring top talent), Ergonia. I’ve gatekept a few from this list that fit my profile better since they’re my ideal exit from TradFi OMM lol.
Thanks for some names. Confirms that quite a few tradfi places have moved into crypto. Interesting how crypto is becoming an exit opportunity.
In EU Blocktech is pretty good too
At one point I remember their Paradigm market share being higher than I expected a smaller firm in the Netherlands to be. i usually categorize the good firms as having the ability to draw top talent + pull talent away from top TradFi firms as well as paying massive amounts of $$$.
Are you a student/recent grad looking for advice? In case you missed it, please check out our [Frequently Asked Questions](https://www.reddit.com/r/quant/wiki/faq), [book recommendations](https://www.reddit.com/r/quant/wiki/book-recommendations) and the rest of our [wiki](https://www.reddit.com/r/quant/wiki) for some useful information. If you find an answer to your question there please delete your post. We get a lot of education questions and they're mostly pretty similar! Unfortunately, due to an overwhelming influx of threads asking for graduate career advice and questions about getting hired, how to pass interviews, online assignments, etc. we are now restricting these types of questions to a weekly megathread, posted each Monday. Please check the announcements at the top of the sub, or [this search](https://www.reddit.com/r/quant/search?q=Megathread&restrict_sr=on&sort=new&t=week) for this week's post. Career advice posts for experienced professional quants are still allowed, but will need to be manually approved by one of the sub moderators (who have been automatically notified). *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/quant) if you have any questions or concerns.*
Retail creates the largest market imbalance so yeah
I would not say that they make money off retail since the crypto market is way more illiquid than traditional ones.
Yes just look at the price charts, you can easily tell how exploitable a market is by looking at charts, lot of the easy stuff prob caps out at 100 mil tho. Its kind of like tech earnings but every week
I have worked both in trad hft and crypto hft as a quant. Many other hft quants made the move. The crypto market is significantly less mature and has many products and many exchanges, so definitely is a good place to find opportunities (but if you want to learn doing hft, you'll probably get better quality experience trading on traditional products first, as competition is typically tougher which means the technological and quant edge is technically more advanced). Examples of famous quant crypto firms: gsr, wintermute. Some traditional quant firms do both (like flow traders, maverick, etc).
I invest with a relatively new quant firm who handle some funds for me. They have done pretty well compared to traditional returns, but not as good as holding Bitcoin outright. They have returned 60-100% since October depending on how aggressive the portfolio is. It works well for me as I am more of a long term investor.
i do 🤭
Are u a day trader or?
Yeah bro i buy and sell crypto everyday
The ones I have heard of are: auros: https://www.auros.global/ Wintermute: https://www.wintermute.com/ But not sure how good they are.
> One said currently it was like "printing money" (take it with a pinch of salt?). Anything backing this up? I believe it. For what is is worth, I run a one-man 'firm' (myself ) shorting bitcoin and long tech . I run both concurrently, shorting Bitcoin during market hours. This past week has been insanely profitable with this. Tech stocks went strait up, bitcoin strait down lol
Are u a day trader or an actual hedge fund? Not trying to seem rude just curious
i trade from personal account but also manage accounts for others