Seeder on the lookout for high-frequency traders

Mon Mar 22, 2010

A new incubation firm is offering seed capital to startup black-box funds.

Trading Cross Connects (TXC), a new hedge fund incubation firm in Jersey City, and its strategic partner, seeding firm Bay Head, are planning to seed and incubate at least four funds this year. The firms are focusing on high-frequency trading strategies across foreign exchange, fixed income, futures and commodities.

Ram Rao, director of sales and business development at TXC, said he is only interested in black-box strategies that hold positions for seconds or minutes, with no overnight trading. The firm looks for strategies with a projected Sharpe ratio of 10 or higher. Rao said a Sharpe of 10 to 20 is commonplace among high-frequency strategies because of their rapid turnover of positions and large number of holdings. He was unable to quantify how...

ISSN: 2151-1845 / CDC10004H

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