>>13434648Look up Long Term Capital Management.
They used some sophisticated technology including Ito's time variable calculus to hedge their positions such that they theoretically eliminated most of the risk in bond arbitrage and some other derivatives instruments.
It worked for a year, then it failed catastrophically when they started burning money at an alarming rate wiping out most of their investor's capital and requiring an intervention from the major banks and federal reserve.
Allegedly Renaissance Capital uses some sophisticated data analysis to drive their trades and have been very successful, but no one has access to their technology.
