Sunday, 28 December 2014
Last updated 30 min ago
Oct 30 2007 | 11:49am ET
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.
Dearborn and his partners, Roland Cozzolino, Scott McMahon and David Silber, are currently raising capital from friends and family. The fund charges a 2% management fee and a 20% incentive fee.
“All of these very talented specialists on the floor are now looking to start hedge funds and we have seen a few like this now and expect there to be more,” said a source close to the firm.
The fund uses Shoreline Trading Group as its prime broker and Goldman Sachs as its custodian.
Dec 1 2014 | 10:21am ET
As 2014 winds down, Northern Trust Hedge Fund Services executives took some time to share their outlook on trends facing the industry in 2015. Read more…
Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.