Blog Posts

The traditional approach to alternative investments has gravitated toward volatility reduction, creating products that provide the desired returns within acceptable volatility/risk thresholds.  But there’s a compelling counterargument: high-volatility alternatives, when properly constructed and managed within a diversified portfolio, can deliver superior compound returns through improved capital efficiency. This shift requires rethinking several foundational assumptions about […]

Pass-through securities are a key component of the fixed-income market and are influential in both institutional and individual investing.  They allow traders/investors to receive payments that are directly “passed through” from a pool of underlying assets, such as mortgages or loans.  We look at what pass-through securities are, how they work, their types, advantages and […]

A Prepaid Variable Forward (PVF) is a financial contract that helps large shareholders monetize stock holdings, hedge risk, and defer capital gains taxes, all while maintaining some exposure to potential stock appreciation. This instrument combines elements of forward contracts, options, and equity collars. Though complex, PVFs are favored by company founders, executives, and high-net-worth individuals […]

Future-start options are a sophisticated class of derivative instruments that are a mix of temporal flexibility and strategic optionality in modern financial markets. These instruments are useful to traders across multiple time horizons while maintaining exposure to future volatility dynamics.   Key Takeaways – Future-Start Options Temporal Flexibility – Future-start options decouple strike selection from […]

Citadel LLC is a $60+ billion multi-strategy hedge fund founded by Ken Griffin, operating across equities, fixed income, commodities, currencies, and derivatives.  We look at how Citadel’s trading strategies have evolved from convertible bond arbitrage into a globally integrated system combining discretionary insight with quantitative precision.  It highlights Griffin’s ongoing leadership, the firm’s rigorous risk […]

Preparing for a quant finance interview involves tackling a range of questions that test your knowledge in mathematics, finance, and programming, along with your problem-solving skills. Behavioral and situational questions will also be part of the interview. Here are some key areas you should be prepared to address, along with example questions and answers for […]

A Corridor Variance Swap is a derivative contract that pays out based on the realized variance of an underlying asset, but only when the asset price falls within a specified corridor (price range).  Unlike a standard variance swap that captures all price movements, this instrument only accumulates variance when the underlying asset trades between predetermined […]

Portable alpha is an investment strategy that involves separating the alpha and beta components of an investment portfolio. The alpha component is the portion of the portfolio that seeks to generate returns through active management, while the beta component is the portion that tracks a benchmark index.   Key Takeaways – Portable Alpha Portable alpha […]

Forward-looking real return expectations for US, global developed, and emerging market equities have declined meaningfully compared to historical averages. We look at the projected ranges and drivers of return across these regions for the next 10 years and beyond, based on valuation, macroeconomic, and earnings growth inputs.   Key Takeaways – Expected Real Returns of […]

A covered call strategy is a type of implementation where a trader will sell a call option while at the same time owning the corresponding amount of the underlying security or instrument. Fundamentally, options are a form of financial insurance. The volatility risk premium associated with options is compensation paid by option buyers to the option […]