1. Apply Market Based Management ® Guiding Principles

KQT, like all Koch companies, has adopted the MBM® Guiding Principles to guide employees as they work to create real, long-term value both within the company and the communities in which they live.

To see the list of MBM® Guiding Principles, click here.

2. Employ rigorous, disciplined analysis

All KQT trading strategies are subject to extensive backtesting, sensitivity analysis, and peer review to ensure strategies meet the targeted requirements for robustness, scalability to large size and economic viability. This development process helps determine if strategies capture a sustainable edge and are not “overfit” to past or recent market conditions.

A key part of our process is the peer review which allows KQT’s diverse cadre of traders, developers and researchers to challenge strategy assumptions, methods and expected results. Although debate is encouraged and expected during peer review, personal criticism is not. This distinction allows us to focus our time and energy on strategy details versus emotional debates.

Once the trade requirements have been met, a flat organization structure facilitates rapid management approval and market implementation of the trading strategies.

3. Employ Principled Entrepreneurship™

Financial and commodity markets are not static. Therefore, to build a sustainable enterprise, KQT must rapidly evolve as the markets evolve. Our ability to survive, and succeed, depends on our ability to innovate. We encourage innovation by challenging the status-quo and embracing change.

But who drives the change? At KQT, we believe most markets evolve far too rapidly for any single person to comprehend. As such, the vast majority of change at KQT is expected to be driven by individual contributors, not just upper management. We believe the strength of an idea should be in the value it creates, not in the originator’s title. Management has input into and ultimate authority over which changes are made, but this is an organization where ideas are largely driven from the “bottom up” versus the “top down”. There are high expectations for each individual contributor to understand, continuously improve, and eventually, radically alter their roles to better serve the market.