ex NYSE specialist starts hedge fund

Discussion in 'Wall St. News' started by SethArb, Oct 30, 2007.

  1. www.finalternatives.com/node/2778

    excerpts below ...

    -A group former New York Stock Exchange floor traders are prepping their maiden hedge fund for launch on Nov. 1. Long Island, N.Y.-based EW Trading is preparing to unveil its
    ExSpecialist Fund, which will trade equities using computer-driven models.-

    -The day-trading fund employs a long/short trading strategy, according to co-founder Chris Dearborn. “It’s algorithmic, IT trading with former specialists from the NYSE floor taking the point of entry into the stocks,” said Dearborn. “It’s not a black-box strategy because we find picking the point of entry as the most crucial point to it. Anybody can have an algorithm but the only control you have over is the opening and the close with stocks fluctuating more than ever before.”-

    -According to Dearborn, the fund abides by three principles. It will hold 95% to 100% of its assets in cash at the end of the trading day, because “we were all down here at 9/11 and you never know what’s going to happen.” The fund will also not trade outside the average quoted size of the stock because “you don’t want to be a market mover, you want to become part of the trend,” and will seek to trade without emotion.-
  2. Div_Arb


    Floor traders moving upstairs for 2 and 20.. Hmm i wonder if this is a trend?
  3. maxpi


    Better to turn your money over to traders than some quants.. and I like the part about how the entry is the important thing... I never agreed with all the "exits are more important" arguments, nor do I think computers are ready for prime time in picking entries quite yet.
  4. RedDuke


    ..The fund charges a 25% management fee and a 20% incentive fee...

    I hope this is a typo, otherwise they will need to net 25% just to show 0 return to their investors.
  5. u21c3f6


    25% of profits?

  6. RedDuke


    It looks like 25% of base and then 20% of profit. This is ridiculous if true.
  7. And this is news to who?

    The migration from the floor has been going on for the better part of a decade. Half of the guys that I used to trade with on the floor have gone on to start hedge funds. It's just the nature of the beast.

    The real headline should have read "Former NYSE Specialist DOESN'T Leave Floor To Start Hedge Fund."

    Now that would have been news!!!!!
  8. "The fund charges a 2% management fee and a 20% incentive fee."

    2 - 20
    Thats standard. It will be interesting to see if and how the playing field changes from the recent trend on the floor.