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- November 3, 2023
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Introduction: Proprietary Trading and its Impact
Proprietary trading firms, colloquially known as ‘prop shops’, represent a distinctive segment in the financial sphere. These firms trade their own capital, enabling them to shoulder significantly more risk compared to conventional broker-dealers. In California, a state famed for its tech and entertainment sectors, these firms have etched out a distinctive place for themselves.
The Rise of Proprietary Trading Firms
In the recent years, California has witnessed a surge in the number of proprietary trading firms. The state’s thriving tech industry and proximity to leading universities have created a fertile ground for these firms’ growth. From the buzzing cityscape of San Francisco to the glitz of Los Angeles, these firms are tasting success in trading diverse assets that range from equities and commodities to forex and derivatives.
Key Players: The Titans of Trading
Several proprietary trading firms in California have gained prominence due to their exceptional performance. Esteemed ones include Jane Street, Optiver, and Five Rings Capital. These firms have harnessed advanced technology and quantitative strategies, leading to substantial returns on their investments.
Overcoming Hurdles: Challenges and Solutions
Despite the immense success, these firms also grapple with a myriad of challenges. From rigorous regulatory scrutiny and unpredictable market volatility to the constant demand for innovation, the obstacles are many. However, these hurdles also pave the way for opportunities. The relentless need for innovation spurs these firms to stay ahead of the curve, pushing the envelope in trading strategies and financial technology.
The Role of Technology in Proprietary Trading
Technology plays a pivotal role in the world of proprietary trading. Firms are continuously leveraging cutting-edge technology to gain a competitive edge. Powerful algorithms, artificial intelligence, and high-frequency trading are some of the technological trends shaping the industry.
Extract Alpha: The Powerhouse of Data
As these prop shops continue to evolve and grow, access to quality data is indispensable. Firms like Extract Alpha play a crucial role in this ecosystem. Extract Alpha’s comprehensive datasets and signals are employed by hedge funds and asset management firms managing an impressive portfolio worth more than $1.5 trillion in assets in the U.S., EMEA, and the Asia Pacific. We collaborate with quants, data specialists, and asset managers across the financial services industry.
The Future Outlook: Opportunities and Predictions
The future of proprietary trading firms in California looks promising. With the rise in technology and the endless potential for innovation, these firms are expected to continue to flourish. Even as they adapt to regulatory changes and market shifts, the capacity for risk-taking and profit-making is immense.
Conclusion: The Importance of Proprietary Trading Firms
Proprietary trading firms in California signify a unique and dynamic component of the financial industry. With their innovative approaches to trading and risk management, these firms have become an integral part of California’s economic landscape. As the industry continues to evolve, these firms are well-positioned to maintain their pioneering status in financial innovation.
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Chloe Miao
Chloe joined ExtractAlpha in 2023. Prior to joining, she was an associate director at Value Search Asia Limited. She earned her Masters of Arts in Global Communications from the Chinese University of Hong Kong.
Matija Ratkovic
Matija is a specialist in software sales and customer success, bringing experience from various industries. His career, before sales, includes tech support, software development, and managerial roles. He earned his BSc and Specialist Degree in Electrical Engineering at the University of Montenegro.
Jack Kim
Jack joined ExtractAlpha in 2022. Previously, he spent 20+ years supporting pre- and after-sales activities to drive sales in the Asia Pacific market. He has worked in many different industries including, technology, financial services, and manufacturing, where he developed excellent customer relationship management skills. He received his Bachelor of Business in Operations Management from the University of Technology Sydney.
Perry Stupp
Perry brings more than 20 years of Enterprise Software development, sales and customer engagement experience focused on Fortune 1000 customers. Prior to joining ExtractAlpha as a Technical Consultant, Perry was the founder, President and Chief Customer Officer at Solution Labs Inc. a data analytics company that specialized in the analysis of very large-scale computing infrastructures in place at some of the largest corporate data centers in the world.
Perry Stupp
Perry brings more than 20 years of Enterprise Software development, sales and customer engagement experience focused on Fortune 1000 customers. Prior to joining ExtractAlpha as a Technical Consultant, Perry was the founder, President and Chief Customer Officer at Solution Labs Inc. a data analytics company that specialized in the analysis of very large-scale computing infrastructures in place at some of the largest corporate data centers in the world.
Janette Ho
Janette has 22+ years of leadership and management experience in FinTech and analytics sales and business development in the Asia Pacific region. In addition to expertise in quantitative models, she has worked on risk management, portfolio attribution, fund accounting, and custodian services. Janette is currently head of relationship management at Moody’s Analytics in the Asia-Pacific region, and was formerly Managing Director at State Street, head of sales for APAC Asset Management at Thomson Reuters, and head of Asia for StarMine. She is also a board member at Human Financial, a FinTech firm focused on the Australian superannuation industry.
Leigh Drogen
Leigh founded Estimize in 2011. Prior to Estimize, Leigh ran Surfview Capital, a New York based quantitative investment management firm trading medium frequency momentum strategies. He was also an early member of the team at StockTwits where he worked on product and business development. Leigh is now the CEO of StarKiller Capital, an institutional investment management firm in the digital asset space.
Andrew Barry
Andrew is the CEO of Human Financial, a technology innovator that is pioneering consumer-led solutions for the superannuation industry. Andrew was previously CEO of Alpha Beta, a global quant hedge fund business. Prior to Alpha Beta he held senior roles in a number of hedge funds globally.
June Cook
June has a background in B2B sales, market research, and analytics. She has 10 years of sales experience in healthcare, private equity M&A, and the tech industry. She holds a B.B.A. from Temple University and an M.S. in Management and Leadership from Western Governors University.
Steven Barrett
Steve worked as a trader at hedge funds and prop desks in Hong Kong and London for 15+ years. He also held roles in management consultancy, internal audit and business management. He holds a BA in Business Studies from Oxford Brookes University and an MBA from Hong Kong University of Science & Technology.
Jenny Zhou, PhD
Jenny joined ExtractAlpha in 2023. Prior to that, she worked as a quantitative researcher for Chorus, a hedge fund under AXA Investment Managers. Jenny received her PhD in finance from the University of Hong Kong in 2023. Her research covers ESG, natural language processing, and market microstructure. Jenny received her Bachelor degree in Finance from The Chinese University of Hong Kong in 2019. Her research has been published in the Journal of Financial Markets.
Kristen Gavazzi
Kristen joined ExtractAlpha in 2021 as a Sales Director. As a past employee of StarMine, Kristen has extensive experience in analyst performance analytics and helped to build out the sell-side solution, StarMine Monitor. She received her BS in Business Management from Cornell University.
Triloke Rajbhandary
Triloke has 10+ years experience in designing and developing software systems in the financial services industry. He joined ExtractAlpha in 2016. Prior to that, he worked as a senior software engineer at HSBC Global Technologies. He holds a Master of Applied Science degree from Ryerson University specializing in signal processing.
Jackie Cheng, PhD
Jackie joined ExtractAlpha in 2018 as a quantitative researcher. He received his PhD in the field of optoelectronic physics from The University of Hong Kong in 2017. He published 17 journal papers and holds a US patent, and has 500 citations with an h-index of 13. Prior to joining ExtractAlpha, he worked with a Shenzhen-based CTA researching trading strategies on Chinese futures. Jackie received his Bachelor’s degree in engineering from Zhejiang University in 2013.
Yunan Liu, PhD
Yunan joined ExtractAlpha in 2019 as a quantitative researcher. Prior to that, he worked as a research analyst at ICBC, covering the macro economy and the Asian bond market. Yunan received his PhD in Economics & Finance from The University of Hong Kong in 2018. His research fields cover Empirical Asset Pricing, Mergers & Acquisitions, and Intellectual Property. His research outputs have been presented at major conferences such as AFA, FMA and FMA (Asia). Yunan received his Masters degree in Operations Research from London School of Economics in 2013 and his Bachelor degree in International Business from Nottingham University in 2012.
Willett Bird, CFA
Prior to joining ExtractAlpha in 2022, Willett was a sales director for Vidrio Financial. Willett was based in Hong Kong for nearly two decades where he oversaw FIS Global’s Asset Management and Commercial Banking efforts. Willett worked at FactSet, where he built the Asian Portfolio and Quantitative Analytics team and oversaw FactSet’s Southeast Asian operations. Willett completed his undergraduate studies at Georgetown University and finished a joint degree MBA from the Northwestern Kellogg School and the Hong Kong University of Science and Technology in 2010. Willett also holds the Chartered Financial Analyst (CFA) designation.
Julie Craig
Julie Craig is a senior marketing executive with decades of experience marketing high tech, fintech, and financial services offerings. She joined ExtractAlpha in 2022. She was formerly with AlphaSense, where she led marketing at a startup now valued at $1.7B. Prior to that, she was with Interactive Data where she led marketing initiatives and a multi-million dollar budget for an award-winning product line for individual and institutional investors.
Jeff Geisenheimer
Jeff is the CFO and COO of ExtractAlpha and directs our financial, strategic, and general management operations. He previously held the role of CFO at Estimize and two publicly traded firms, Multex and Market Guide. Jeff also served as CFO at private-equity backed companies, including Coleman Research, Ford Models, Instant Information, and Moneyline Telerate. He’s also held roles as advisor, partner, and board member at Total Reliance, CreditRiskMonitor, Mochidoki, and Resurge.
Vinesh Jha
Vinesh founded ExtractAlpha in 2013 with the mission of bringing analytical rigor to the analysis and marketing of new datasets for the capital markets. Since ExtractAlpha’s merger with Estimize in early 2021, he has served as the CEO of both entities. From 1999 to 2005, Vinesh was the Director of Quantitative Research at StarMine in San Francisco, where he developed industry leading metrics of sell side analyst performance as well as successful commercial alpha signals and products based on analyst, fundamental, and other data sources. Subsequently, he developed systematic trading strategies for proprietary trading desks at Merrill Lynch and Morgan Stanley in New York. Most recently he was Executive Director at PDT Partners, a spinoff of Morgan Stanley’s premiere quant prop trading group, where in addition to research, he also applied his experience in the communication of complex quantitative concepts to investor relations. Vinesh holds an undergraduate degree from the University of Chicago and a graduate degree from the University of Cambridge, both in mathematics.
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