This is a good question! Some possible answers - 1. Infrastructure that is too expensive or too hard to build yourself (eg colocation, low latency data feeds, compute clusters, fpgas) 2. Data that is too expensive or simply impossible to buy (eg historical tick data)https://twitter.com/mobile_mm/status/1373427747901542402 …
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Plus within an institution you get access to a wider net for hiring, expertise in filtering candidates, and probably you just see higher quality people to begin with.
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If things go south and you have a down year, a solo trader who hired an analyst now has to fire them. Within an institution there are buffers (maybe you can cover their base of of next year’s pnl or they get reassigned to another team) so that the talent doesn’t just disappear.
End of conversation
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