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TFC Commodity Trading Forum

secret trading code at Renaissance Technologies *LINK*

Federal regulators are probing the secret trading code at Renaissance Technologies, the massive quantitative hedge fund run by James Simons and Robert Mercer, The Post has learned.

The Commodity Futures Trading Commission has recently asked to dig into the trading software at the $65 billion hedge fund, James Rowan, the fund’s chief operating officer, told an audience of hedge fund managers on Tuesday in New York, according to two people who were in the audience.

But Renaissance, which is about as secretive as it is lucrative, is pushing back against the CFTC’s request out of fear that the code will “leak,” Rowan told the managers, according to those present.

These algorithms are often black boxes, and are so complicated that it would be nearly impossible to figure out what they’re designed to do, or why they do it.

Regulators are concerned there could be an illegal trading practice, like creating fake orders to move the prices of illiquid stocks, which is known as spoofing.