Josh, that's more a presentation than a 10 second explanation, but I liked it.

I live in France and the only word I know is bo(u)rsicoter which basically means to trade. But in my case, I use quantitative systems to make medium term (3 months'ish) investments. The difficulty with describing being a quant/algorithmic investor or trader is that most people can only comprehend that with being a day trader. Many here are probably what would be called day traders, and successful, being in the 10% minority, but the majority of day traders are just the suckers and I feel the greater general community is aware of this. So being referred to as a boursicoteur or day trader is generally not a sign of respect.

Graeme:

I'm glad you liked it, but you are right; it is substantially longer than the "elevator explanation" that was called for. Too much stream of consciousness. In retrospect, I might skip the preamble and just stick with 12-20.

First, decide whether or not you want to have a further discussion. You may want to solicit the questioner as a client, in which case you want a further discussion. Or you may want to kill off further inquiry from a busybody. Some of those questioners may wonder about the morality or legality of what you do. Then reply accordingly.

For example, if someone outside the industry asks what you do, you could respond, “We trade the stock market” or “we trade commodities [or currencies]”. That will usually prompt further questions. Should you respond that you trade futures or derivatives, you will get puzzled looks as most people don’t know what they are. Then you could get deep into an instructional conversation that will get you nowhere. Responding only that you are a “trader” is guaranteed to get additional questions out of puzzlement.

Mostly we do not want to get into discussions with the financially unwashed, so we respond “We are statistical researchers.” Since no one wants to know anything about statistics as a science, that usually kills their interest. Rarely does someone go further to ask how we make money doing that, in which case we reply that we trade the stock market.

If you get a question from someone in the business, you also have a choice of responses that will solicit differing further questions. The comment “we run a family office” usually will get less questions than “we run a fund”. The latter will almost always get you “how large is the fund”. The response “we are buy-side researchers” usually gets following questions, most of them good.

BTW, all of the above examples are true for many people in the industry. So you are not telling any lies.

Bill Rafter

Futures, stock, FOREX markets create frequent opportunities to make big money. This property has been named recently the main fundamental regularity or law of a speculative market http://arxiv.org/pdf/1312.2004v1.pdf (Section "2 Inalienable Property of a Speculative Market"). Intuitively, market participants are aware of it. An objective measure of the frequency and magnitude of these opportunities has been proposed in a view of the maximum profit strategy. As long as a market will continue creating profitable opportunities with the frequencies and sizes comparable with those reported, it will survive, attract new traders, build confidence in minds of those who made money, and encourage those who lost capital.

Some people feel the arising opportunities and attempt to act synchronously. Others hope to catch them using computers and programs evaluating historical data and monitoring new information and events. Writing such programs requires developing algorithms.

Best Regards,

Valerii