Amazon Web Services Crashed
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Nov 25, 2020
Yellin for Yellen
The beginning of the Biden transition has seen Janet Yellen crowned as the Treasury Secretary; Wall Street is rejoicing.
Yellen, a past chair of the Federal Reserve and author of The Fabulous Decade is believed to have no reservations about intervening in the economy when she takes the seat. While stock prices make it easy to forget, the virus still rages on, shutting businesses permanently and leaving deep scars of unemployment that may not heal so easily in its wake
Is Apple The Enemy?
Apple (NASDAQ: AAPL) has been under heavy fire from both sides of the pond in regards to antitrust investigations. The tech giant in response to these cases, brought their App Store commission down from 30% to 15% for companies making less than $1 million in App Store revenue per year.
Apple’s App Store accounts for billions of dollars in revenue. The system in place currently forces an app developer with in-app purchases to go through Apple’s proprietary payment system that forces developers to pay a 30% commission.
AWS Crash
Amazon Web Services, a subsidiary product of Amazon (NASDAQ: AMZN) reported an outage in their enormous cloud computing software that affected many customers and clients on the east coast.
Several companies took to Twitter to let customers know of issues. One of the largest companies to be affected by the outage was Roku (NASDAQ: ROKU) which had to let customers know that some services may be down.
Amazon Web Services is one of the largest cloud services in the world and an outage like this is bad PR for a company of that stature.
The Good, the Bad, and the Ugly Special Series: Quant Trading (3/5)
Although we were harping on Jim Simmons and Renaissance yesterday, his Medallion Fund has clocked in annualized returns of 66% between 1988 and 2018 — it’s legendary for a reason.
On the whole, one estimate has computers managing 33% of dollars being traded; while not every single one of these algorithms can possibly be performing like the Medallion Fund, they can all be trading faster than is humanly possible. This is great to exploit arbitrage opportunities (arbitrage is defined below), if the opportunities truly are arbitrage.
In 1998, Long Term Capital Management, a quant fund led by nobel laureates allegedly performing arbitrage with 100x leverage, blew up and almost tanked global financial markets. Turns out their “risk free strategies” had a little bit more to them than they initially thought.
This was not the last time a quant fund exploded and cost a lot of people who weren’t even invested money… on Friday, we’ll finish up by describing what the future of this volatile corner of finance might be.
Arbitrage Education
Arbitrage is the practice of finding and exploiting risk free trades for small gains. This type of trade can be as simple as buying a stock on one exchange and immediately selling it on another; as a matter of fact, computers constantly equalizing price discrepancies for us is one reason that share prices are so uniform.
The profit made from arbitrage is often times so low that it is not justifiable for a retail trader to perform. Instead, larger funds with the ability to move great amounts of money are the ones that get to take the profits here.
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