[trpc]

Investment banks don't even have the secret sauce, hedge funds like Renaissance Technologies and D. E. Shaw & Co. are the ones that have it

[chrisfinazzo]

It's a bit disingenuous to say that BB's don't have a stake in HFT.

At the time of Aleynikov's case, Goldman was routinely at the top of the NYSE rankings with regard to programmatic trading volume.

[nickles]

> Goldman was routinely at the top of the NYSE rankings with regard to programmatic trading volume.

I took 'secret sauce' in GP's comment to mean 'profitable strategies'. Don't confuse volume with profitability. It's conceivable that a BB would deliberately lose money in some activities to have clients give them other, more profitable flow/business.

[chrisfinazzo]

That's true. It's "LeFevre's corollary", if you will :)

N.B, Lapdance not gauranteed

[kranner]

Investment banks have proprietary trading desks that are effectively hedge funds.

[jen20]

GS used to be nicknamed “the worlds largest hedge fund”. They have plenty of world class proprietary tech, but the OP is right: this is not likely to be secret sauce at all.

[JackFr]

That's Harvard's endowment. Harvard University itself exists at this point merely as a tax dodge for the $37 billion AUM hedge fund.

[ryeguy_24]

I don’t think this is accurate. Regulators release the Volcker Rule to shut down prop trading at banks.

[nickles]

The Volcker rule contains exemptions for certain prop trading activities. For example, trading in US government bonds is exempt.

[rbavocadotree]

Here's nice flowchart[0] to determine what counts as proprietary trading. There is a surprising amount that is still allowed.

https://www.davispolk.com/files/DavisPolk_Final_Volcker_Rule...

[govg]

There still exist principal investing groups, as well as market making groups that can contribute to the bottom line.

[ryeguy_24]

Right. They have tons of trading activities that are non-proprietary. I’m sure they can always hide some positions that are truly proprietary but largely they are not supposed to put on positions for their own gain.