Market risk is not physics. It just acts like it. Until it doesn’t.
One of the early quants at former Wall Street heavyweight Salomon Brothers, Dr Lance Smith has a rich mathematical background, but believes there is much more to risk management than the mathematical models.
“A tsunami strikes Japan, or a Brexit strikes the UK,” says Smith. “Things happen that are not in the tea leaves of historical data. On the other hand, physics is repeatable. Given the same starting point and conditions, you can predict the outcome with well-defined and known probabilities.”
“Not so with the markets,” he adds. “You don’t get do overs. Traders make bets that are tilted in their favor, and the key is to make sure that you can survive the negative surprises and reap the benefits of making such bets.”
GUANGZHOU, November 19, 2012 – GF Securities, one of the five largest securities firms in mainland China, selected Imagine Software's award-winning, cloud-based solution to satisfy its need for an integrated portfolio and risk management system.
NEW YORK, December 19, 2013 - Imagine Software, a leading provider of real-time portfolio and risk management solutions to the global financial community, today announced that it was named "Most Innovative Technology Provider" of 2013 by HFMWeek.