Blog Posts

Mixed Integer Programming (MIP) is a specialized form of mathematical optimization. It’s used in solving problems that require decision-making in discrete steps, often under complex constraints and variables. In the context of trading and investing, MIP allows for the creation of models that can handle a range of trading/investment decisions, from portfolio optimization to order […]

Nonlinear programming (NLP) is a mathematical optimization technique for solving complex problems where the objective function or the constraints are nonlinear. In trading and investing, NLP is used in portfolio optimization, risk management, and identifying trading strategies that maximize returns or minimize risk.   Key Takeaways – Nonlinear Programming in Trading & Investing Better Optimization […]

Quadratic programming (QP) is a type of mathematical optimization used in portfolio management and trading/investment strategies. Its primary function is to optimize asset allocation to achieve the best possible risk-adjusted returns.   Key Takeaways – Quadratic Programming Optimizes Portfolio Allocation – Quadratic programming helps determine the optimal asset mix to maximize returns for a given […]

Oil prices have a major influence in determining global economic stability and shaping the dynamics between countries with varying political systems. The relationship between oil-exporting nations and the rest of the world not only affects trade balances but also carries significant implications for geopolitical power and financial flows. In this article, we’ll look at the […]

Bond ETFs and bond futures offer different mechanisms for trading or investing in bonds and managing risk. Understanding their distinct features, advantages, and disadvantages is important for traders looking to optimize their portfolio strategy.   Key Takeaways – Bond ETFs vs. Bond Futures Liquidity and Trading Hours Bond ETFs offer intraday liquidity similar to stocks. […]

Gold attracts traders/investors for its potential to hedge against currency devaluation, inflation (over the long run), and economic/geopolitical unknowns. Two popular instruments for gold trading or investment are gold exchange-traded funds (ETFs), commonly represented (most commonly) by GLD, and gold futures, denoted by GC. Each offers distinct features, benefits, and risks.   Key Takeaways – […]

The S&P 500 ETF (SPY) and S&P 500 Futures (ES) are two popular financial instruments. Both derive their value from the S&P 500 index, yet they differ a lot in terms of structure, trading characteristics, and their use in trading/investment strategies.   Key Takeaways – S&P 500 ETF vs. S&P 500 Futures (SPY vs. ES) […]

Volterra processes are used in various fields, including finance and economics. They’re known for their versatility in modeling memory effects and non-Markovian dynamics that are often encountered in real-world systems.   Key Takeaways – Volterra Processes Memory Effect Volterra processes incorporate history or “memory” of past values. Allows traders to model asset prices with more […]

Weather derivatives are financial instruments that can be used to hedge or speculate on the impact of weather conditions, such as temperature, rainfall, or snowfall. These instruments are used by businesses whose financial performance is significantly affected by weather, such as agriculture, energy, and tourism sectors. There are various models used to price and manage […]

Energy derivatives are financial instruments whose value is derived from the underlying energy products like oil, natural gas, electricity, or renewables. These derivatives are commonly used for hedging and speculative purposes. This allows traders to manage or take on the risk associated with the price volatility of energy commodities.   Key Takeaways – Energy Derivative […]