Blog Posts

Deterministic global optimization refers to a branch of mathematical optimization that doesn’t rely on probabilistic methods to find the global maximum or minimum of a given function. In the context of trading and investing, it involves applying rigorous mathematical techniques to optimize trading strategies, portfolio allocations, and trading models with the aim of achieving the […]

Principal Component Analysis (PCA) is a statistical method used to simplify the complexity in high-dimensional datasets by reducing the dimensionality. This technique transforms the original variables into a new set of variables – termed the principal components – which are uncorrelated and ordered in a way that the first few retain most of the variation […]

Stochastic programming is a framework for modeling optimization problems that involve unknowns. In the context of trading and investing, it’s used to make decisions under uncertain market conditions. The objective is to optimize the expected outcome considering the random variables that represent risks and opportunities in financial markets.   Key Takeaways – Stochastic Programming in […]

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) […]