top of page
sc190804 (2).jpg

Toby Carrodus

QUANTITATIVE RESEARCHER

HEDGE FUND ANALYST

TRADER

Focus:

  • Intraday (Medium-Frequency) Systematic Global Macro

  • Traditional Systematic Global Macro

  • Discretionary Global Macro

Asset Class Experience:

  • Fixed-Income

  • Commodities

  • Currencies

  • Stocks

Instrument Experience:

  • Futures

  • Swaps

  • Options

  • Cash

  • LinkedIn
  • ssrn
  • Google Scholar
  • substack
  • Medium
  • Twitter
  • Instagram
  • Academia

About Me​

Toby_Carrodus_Hedge_Fund_edited_edited_e

  • I am a quantitative researcher & trader with a focus on high-Sharpe systematic trading strategies.

  • My career has been on centered on global macro trading & has taken me to Frankfurt, London, Sydney & Los Angeles to work at firms such as PIMCO and Winton Capital. 

  • For most of the last decade my focus has been on medium-frequency futures trading.

  • While the majority of my work is confidential, in my spare time I like to publish articles on topics ranging from portfolio management to central banking and trading epistemology.

  • I also offer a scholarship for university students from low socio-economic backgrounds.

  • Outside of work, I am a fitness fanatic and enjoy surfing and hiking in the alps, & spending time with my family.

ARTICLES

RESEARCH ARTICLES

It's Time to Review Our Central Banks - SSRN

​

Abstract

Central banking has led to several problematic developments that societies across the world are now suffering from. This article provides an overview of the current central banking practice of inflation-targeting and reviews the problems associated with it. These include the inflation of asset prices leading to class and intergenerational inequality and the accumulation of unsustainable public and private sector debt that burdens future generations. The absence of a market-based mechanism allows governments and households to engage in fiscal largesse. Other problems include the creation of perverse investor incentives in the form of moral hazard and financial repression and the excess consumption the earth’s finite resources by propping up economic growth. The complexity of the economy and suitability of central banks’ current decision-making by committee is discussed and a proposal for a new approach is made with an example for Australia.

​

Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4209973

An Elementary Introduction to Risk Parity - SSRN

​

Abstract

Risk parity is a powerful portfolio construction approach that achieves diversification in terms of asset risk exposures. It masterfully utilizes information on volatilities and correlations to balance a portfolio such that each asset in the portfolio contributes equally to total portfolio risk. This article seeks to explain the benefits of risk parity as an approach to portfolio construction, as well as outline the theoretical foundations of this approach in as clearer manner as possible. For reader clarity, both summation notation and matrix notation are used in derivations. This article has been written in response to the author’s own challenges with finding a clear, holistic overview of the risk parity approach and its derivation.

Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4250812

Trading & the Limits of Human Reason - SSRN

​

Abstract

This article links the foundational research of Friedrich von Hayek on the human mind and the limits of its reasoning ability to the world of trading. Hayek advocated the use of rules as a means of overcoming our inability to comprehend the full complexity of reality in its entirety. The usefulness of a rules-based approach to trading is illustrated by highlighting the well-documented inability of retail and institutional investors to outperform standard industry indices, which are themselves rule-based systems. In terms of establishing the most appropriate trading rules, a delineation between simple and complex phenomena is discussed, and salient points for best-practice trading research are referenced.

Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4190925

My Submissions to the Review of the Reserve Bank of Australia

​

Abstract

My submission for the Review of the RBA covers i) monetary policy frameworks and ii) RBA performance. I discuss the effectiveness of determining monetary policy via a centralized, committee-based framework compared to a market-based framework. I highlight the RBA's narrow interpretation of the Act as equating to 2-3% inflation and the adverse side-effects of this. I propose an alternative involving Australia’s banking system to mitigate the problems associated with the RBA’s current arrangement.

Available at: https://consult.rbareview.gov.au/public-submissions/view/74

BLOG POSTS

BLOG ARTICLES

How to Succeed as a Quant

​

There is no doubt that trading markets has always been about the numbers. This is increasingly so nowadays, where machine learning and artificial intelligence are the buzzwords du jour. This trend has seen ‘Quantitative Analysts,’ nicknamed ‘quants’, thrive on Wall St and command exorbitant incomes. This may give you the impression that you need a PhD in Mathematics or Computer Science to succeed in the fast-paced, cut-throat world of modern finance. While this certainly doesn’t hurt, such advanced degrees are not a requirement to succeed in this field.....

​

https://tobycarrodus.substack.com/p/how-to-succeed-as-a-quant

When - If Ever - To Meddle With Your Trading System?

​

Over the years I have been in many debates with colleagues about if, and when, one should interfere with a trading system. Mostly, I have been opposed to intervention as it generally defeats the purpose of adopting a systematic approach. It never ceases to astonish me how ‘systematic’ traders begin to fiddle with their systems when volatility rises or a trading system enters an inevitable drawdown. In most cases, I have found that such interventions achieve little more than medicating trader anxiety about trading losses to the detriment of long-term returns.....

​

https://tobycarrodus.substack.com/p/when-if-ever-to-meddle-with-your

The Benefits of Simplicity in an Age of AI Hype

​

In today's fast-paced world of trading, it can be tempting to chase after the most complex and sophisticated models to try and stay ahead of competition. However, greater complexity is not always better. In fact, there is a growing body of research that indicates simple is often better......

​

https://tobycarrodus.substack.com/p/the-benefits-of-simplicity-in-an

Habits That Have Made Me A Better Trader – And Person

The habits we adopt have a tremendous impact on our long-term trajectory. This line of thinking has received growing attention over the last decade, most notably thanks to James Clear and his book ‘Atomic Habits.’ The reasoning for this should be intuitive to traders, as it harnesses the power of compounding. Small, incremental improvements each day, such as aiming to get even 1% better, compound over time, generating massive gains.......

​

https://tobycarrodus.substack.com/p/habits-that-have-made-me-a-better

How to Hijack Your Brain to Get What You Want In Life

The human brain is an incredibly powerful tool. It efficiently operates with small amounts of information to continuously perceive and process the world around us. The brain is also different from the mind, despite these words being used synonymously. How? One aspect that makes this clear is that when you die, your brain is still here, but your mind is not. Analogously, you could say your mind is a form of “software” and your brain “hardware......."

​

https://tobycarrodus.substack.com/p/how-to-use-your-brain-to-get-anything

Trading: The Odyssey

I have always been enamored with the story of Odysseus. During his epic journey home to Ithaca from the Battle of Troy, Odysseus travels through Greek Islands and encounters cyclopes, Gods such as Poseidon and beautiful women like the Sirens. Such a tale obviously appeals to the imagination of any young lad with an adventurous streak.

​

https://tobycarrodus.substack.com/p/trading-the-odyssey

SCHOLARSHIPS

I offer a university scholarship for students with big ambitions who exhibit exceptional promise, resilience and dedication to their studies and community, but face financial barriers to pursuing their education.
‍
The scholarship program aims to recognize talent and ambition regardless of financial circumstance and help individuals maximise their own potential for success in their chosen field.

​

Further details are available at www.tobycarrodusscholarship.com.au

INTERVIEWS & CONTRIBUTIONS

INTERVIEWS
sc190333_edited.jpg

TOBY CARRODUS

  • Linkedin
  • ssrn
  • Google Scholar
  • substack
  • medium
  • Twitter
  • Instagram
  • Academia
bottom of page