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STAC Midwinter Conference Recap

Traders Magazine Online News, January 17, 2018

Chuck Mackie

The polar vortex that gripped Chicago from the latter half of December through the New Year briefly relented last week, just in time for the Security Traders Association of Chicago to hold their annual Mid-Winter Conference. Attendance was strong, with over 600 registered for the event, and a program that combined the old (e.g. market data) with the new (e.g. emerging technologies) provided a number of interesting insights.

Emerging Technologies and Trading Signals

The conference began on an interesting note as Catherine Clay from Cboe Global Markets led a panel on emerging technologies with Sam McIngvale from Apex Clearing, Feargal OíSullivan from USAM Group, and Erik Schlesinger of Alpha Consulting. Touching on the topics of AI, big data, cryptocurrencies, blockchain, cloud, and others, the panel cut through the hype and gave a clear eyed view of the shape of technology in the markets. On the subject of AI, for instance, Clay began with an analogy from the 70ís about a computer that can make a perfect chess move in a burning room while McIngvale posited that AI hasnít been fully manifested on the retail side yet because there is so much long-hanging fruit (e.g. UX and design) that can be harvested first. OíSullivan touched on the big data challenges that precede AI insight and Schlesinger discussed the interesting opportunities in human assisted AI, particularly in trade research.

Asked by Clay to note a technology blindspot or an unusual prediction, Schlesinger said that bitcoin will lose its prominence while cryptocurrencies continue to gain in prominence (he said it feels like 1997 in retail equities). OíSullivan thinks that HFT will come back to the fore as volatility returns to the market and McIngvale mentioned a rise in direct index investing. Letís check back next year to see how they all did with their predictions, shall we?

The Trading Signals panel was headed by Jerry Hanweck of Hanweck Associates and featured Jared Broad of QuantConnect, Don Dale from Equity Risk Control Group, and Mike Wisnefski from MaterialsXchange, and for once I wished the panelists had talked more about their products and companies rather than in general terms. Broad, for example, is part of the potentially revolutionary trend to democratize big data and complex analytical tools for algorithmic trading and Wisnefski is bringing electronic trading capabilities to heretofore opaque markets like lumber and other materials. However, neither spent time discussing the disruption that their respective companies are creating. In the end, interesting comments included:

  • Broad describing the use of gray, not black, boxes for trading.
  • Dale discussing the unexpected fact that utilities were one of the most volatile sectors in 2017.
  • Wisnefski elaborating on trading opportunities that occur when algos hesitate or exit from trading.
  • Hanweck talking about how the markets have only begun to scratch the surface when it comes to alternative data.

More than Meets the Eye: ETFs, Market Data, and CAT

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