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Kelly Criterion

Optimal Capital Growth

 

The Kelly Criterion is an algorithm that allocates capital to positive expectation trades with the goal of maximizing the expected compound growth rate of capital over the long term and without the risk of losing any predetermined amount of that capital at any given time. 


Great traders and investors such as Thorpe, Simons and Buffet have used the Kelly Criterion successfully for decades. No informed investor or economist disputes the fact that a Kelly strategy outperforms any other capital allocation strategy in the long run. That's just plain math.


Kelly Criterion has rightly been criticized for the short term, stomach-churning, volatility that arises from pursuing geometric growth rates. That too is just math. Our proprietary Kelly based algorithm reduces this volatility considerably without sacrificing too much of the long term growth rate.

DEEPAK KANUNGO

FOUNDER & CEO

 

Deepak leads the team at Hedged Capital, an artificial intelligence powered trading and advisory firm founded in June, 2009 and based in San Francisco, California.


During the throes of the Financial Crisis of 2008, Deepak was in a special, one year financial advisory program at Morgan Stanley. That tumultuous year gave him deep insights into the practice of investment management and the financial theories he had studied earlier while pursuing his Master's degree at The London School of Economics.

A couple of months after the market hit rock bottom in March of 2009, Deepak founded the firm. He relied extensively on his undergraduate education at Princeton University in Astrophysics and Philosophy to research and develop a game theoretic approach to trading options in real world, imperfect markets with its mercurial participants.


He also leveraged his decade long experience as a Silicon Valley inventor, entrepreneur and management consultant developing financial technologies for marquee clients such as Visa, Schwab, Federal Home Loan Bank, Silicon Valley Bank and Fimat/Societe Generale.​​

Formerly, Deepak was a Director in the Alliances and New Ventures Group at MasterCard International and a Senior Systems Analyst at Diamond Technology Partners (acquired by Pricewaterhouse Coopers).​