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This Ex-Quant Had to Quit Wall Street to Build a 24/7 Stock Exchange | QFEX, Annanay Kapila

EO11:30Added Aug 31, 2026

Annanay Kapila ran trading strategies that moved $10 billion a day, roughly the GDP of France. He walked away from it all to build QFEX, the 24/7 global stock exchange he always wished existed.

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Contributed by 刘嘉琪

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  1. Intro

  2. 00:00I've worked as a quant in high frequency
  3. 00:01trading $10 to hundred billion dollars a
  4. 00:03day just you know the strategies that I
  5. 00:05was responsible for $10 billion a day is
  6. 00:08roughly the GDP of France I was earning
  7. 00:10big fat paychecks as well but I felt
  8. 00:13that I was wasting my life high
  9. 00:14frequency trading is all about
  10. 00:16exploiting market inefficiencies I saw
  11. 00:18how much money we were making due to
  12. 00:20simple structural design flaws in
  13. 00:21existing markets people in trading just
  14. 00:23want to make money so they can earn big
  15. 00:25bonuses right I'm an founder and CEO of
  16. 00:27QFX I used to work in the quan finance
  17. 00:30sector before I realized a lot of
  18. 00:32financial markets infrastructure is
  19. 00:33broken and now we're building the next
  20. 00:3524/7 global stock exchange which is
  21. 00:37going to revolutionize trading we had
  22. 00:40two major funds one was general catalyst
  23. 00:42one was next venture partners round
  24. 00:43collision 95 million valuation we
  25. 00:45weren't making any revenues who were
  26. 00:46pre-revenue raised 95 million valuation
  27. 00:49the only point in raising venture money
  28. 00:51is if you can be massive right like
  29. 00:53truly massive then a VC will find it
  30. 00:55very hard to say Uh,
  31. 01:06you know, certainly a lot of people in

  32. Money is Killing the Best Talent on This Planet

  33. 01:08the US, I feel a lot of them could be
  34. 01:09kind of pursuing an entrepreneurial path
  35. 01:10because their future is so set. And for
  36. 01:12me, it was really obvious to see given
  37. 01:14my background. You know, obviously I was
  38. 01:14born in India and then my friends came
  39. 01:16to the UK. You know, they left behind a
  40. 01:18lot in India to kind of start over in
  41. 01:19the UK.
  42. 01:21I studied maths at university. I started
  43. 01:23thinking about what I wanted to do with
  44. 01:24my life towards the end of my time at
  45. 01:26Cambridge. We weren't very wealthy
  46. 01:28growing up and uh job in quantitative
  47. 01:30finance, quantum trading. It just paid a
  48. 01:32lot of money. I had an option to do a
  49. 01:34PhD as well, something more impactful,
  50. 01:36but like the money was too good to pass
  51. 01:37up. And after I left Cambridge 2020, I
  52. 01:40worked at a Dutch high frequency trading
  53. 01:41firm called Flow Traders for a year and
  54. 01:43then I got headunted to an American firm
  55. 01:45called Tower Research Capital where I
  56. 01:46worked for almost 3 years. When you work
  57. 01:48as a trader as a quant, first thing I do

  58. How HFT Really Makes Money

  59. 01:50when I get in, you know, not even when I
  60. 01:52get in, when I wake up, I have my work
  61. 01:53laptop. I check how much money we've
  62. 01:55made. In quan, everything is data driven
  63. 01:57and you're not doing trading by talking
  64. 01:59to people. You're just looking at data
  65. 02:00and you're trading from data. People ask
  66. 02:02me for like a real world analogy. I
  67. 02:04often say it's like running a car
  68. 02:05dealership. Somebody runs a car
  69. 02:06dealership. You can sell your car to
  70. 02:08them. You can buy a car from them and
  71. 02:09their job is basically to kind of have
  72. 02:10an inventory of cars ready to sell. And
  73. 02:13they buy cars at a little slightly lower
  74. 02:15price and sell cars at a slightly higher
  75. 02:16price. And the reason Quant Finance is
  76. 02:19able to make so much money is because so
  77. 02:20much volume trades in the markets. You
  78. 02:22know, the S&P 500 future on CME, that's
  79. 02:24one future, one product, trades $500
  80. 02:26billion a day. That's like more than the
  81. 02:28GDP of any country. But I think there's
  82. 02:31a lot of cognitive dissonance amongst
  83. 02:33quants and traders that they've kind of
  84. 02:34convinced themselves because they're
  85. 02:35earning big fat paychecks and you know,
  86. 02:37I was earning big fat paychecks as well
  87. 02:38that hey, you know, we're making a lot
  88. 02:40of money. We must be doing something
  89. 02:41good for the world. High frequency
  90. 02:42trading is all about exploiting market
  91. 02:44inefficiencies like futures that expire
  92. 02:46for example. You know S&P futures expire
  93. 02:49every three months because that
  94. 02:50coincides with the time of the harvest
  95. 02:51for certain crops in the Midwest.
  96. 02:53There's no need for them to expire. If
  97. 02:54they expire, what happens is people have
  98. 02:57to sell the future, buy the next one.
  99. 02:58They pay transaction costs every time
  100. 03:00they trade and they lose money and high
  101. 03:02frequency traders make the other side of
  102. 03:03the money. No one in quant trading wakes
  103. 03:05up in the morning and they think, "Oh,
  104. 03:06how do I make the markets more efficient
  105. 03:08today? How do I lower cost of consumers
  106. 03:09every day?" People in trading just want
  107. 03:11to make money so they can earn big
  108. 03:12bonuses and I think Tower has really

  109. The Golden Handcuffs of Big Paychecks

  110. 03:16really high quality of talent. So you
  111. 03:18know a lot of my colleagues were
  112. 03:19international math Olympiad medal
  113. 03:20winners. There's this entrance exam in
  114. 03:22India for like the top technical
  115. 03:24universities called it. A lot of them
  116. 03:25are ranked in kind of the top 50 in
  117. 03:26India when they they did this test.
  118. 03:28They're stuck in the same golden
  119. 03:29handcuffs. You know they're getting paid
  120. 03:31too much basically and they don't want
  121. 03:32to leave. Quant finance has sequestered
  122. 03:36a lot of very talented people in an
  123. 03:38industry that basically adds no value to
  124. 03:40the world and that was really the source
  125. 03:41of the guilt. I felt that I was wasting
  126. 03:43my life. Think carefully why you're
  127. 03:46doing it. Think about honestly is is
  128. 03:48this what you want to be doing in 5 7
  129. 03:49years time. Almost nobody I spoke to
  130. 03:53said they would still be in the job in 5
  131. 03:56years time. A lot of them were like 2 3
  132. 03:57years and I'll go do something else.
  133. 03:59Like you know they're still there. So,
  134. 04:00are they still there because they want
  135. 04:02to be there or are they still there
  136. 04:03because they failed to re-evaluate?

  137. But You Need Money to Chase What Matters

  138. 04:09Towards the end of my time at tower, a
  139. 04:11bunch of things happened in life that
  140. 04:12kind of aligned that made me think that
  141. 04:14maybe I should leave this and and build
  142. 04:15a startup. FTX was a very profitable
  143. 04:17business. They were backed by Sequoia,
  144. 04:19very high valuation. I don't want to
  145. 04:21defend SPF and say, you know what, he
  146. 04:22did a good thing or the end justifies
  147. 04:24the means. I think what he did was
  148. 04:25clearly wrong. He does deserve to be in
  149. 04:26prison. But I think on the innovation
  150. 04:28side is a very successful company. A lot
  151. 04:30of the product that they made was
  152. 04:33actually really good. I think another
  153. 04:34really interesting thing is that FTX did
  154. 04:36try to go down the path of US licensing
  155. 04:40and US regulation. FTX purchased an
  156. 04:42exchange in the US. Interestingly, I'd
  157. 04:44already had the idea to do this
  158. 04:45exchange. what is now Q effect like
  159. 04:46about 6 months before I have like a
  160. 04:48burning desire to improve the markets
  161. 04:52because I've worked on the other side of
  162. 04:54the markets as a quant in high frequency
  163. 04:56trading and I thought if the aim really
  164. 04:58is to make markets more efficient why
  165. 05:00don't you just improve the nature of the
  166. 05:02market and improve the nature of the
  167. 05:03design so that high frequency trading
  168. 05:05firms don't make all this money which
  169. 05:06they're just extracting from investors
  170. 05:08and the market just becomes fairer that

  171. Leaving a Top Hedge Fund Job

  172. 05:10way towards the end of 2024 early 2025 I
  173. 05:13kind of pitched this idea to my
  174. 05:14co-founder one my best friends. We've
  175. 05:16known each other for a very long time. I
  176. 05:17guess like since we were 18 pretty much.
  177. 05:19Josh worked at Citadel, but on the
  178. 05:20engineering side, he didn't know
  179. 05:22anything about the exchange side of
  180. 05:23things, right? He just called me like,
  181. 05:24"Hey, I have this like crazy idea." I
  182. 05:27was like, you know, this is so obviously
  183. 05:28like a better market design that there
  184. 05:30no way it doesn't exist in 5 or 10 years
  185. 05:32time, right? And either the incumbents
  186. 05:34get their act together or we do it. He
  187. 05:37was like, "Yeah, like let's let's do
  188. 05:38it." He left his job at Citadel, which
  189. 05:40is one of the top hedge funds in the
  190. 05:42world. job was going pretty well and I
  191. 05:44had a lot of money saved up, I wouldn't
  192. 05:45be under any financial pressure. Once
  193. 05:47that side of the equation was solved for
  194. 05:48and I had some decent money in the bank,
  195. 05:50then I thought, okay, it's it's time to
  196. 05:51do something that, you know, I want to
  197. 05:53make my life's work. I left my job in
  198. 05:55February 2025. You know, I was really
  199. 05:58getting to the point where I was
  200. 05:59thinking, hey, you know, can anything
  201. 06:01really go wrong if I spend, you know, 2
  202. 06:023 4 5 years of my life, let's say, and
  203. 06:04and things don't don't really work out.

  204. Build Something Worth Telling Your Grandkids

  205. 06:10You know, we applied for funding from Y
  206. 06:12Combinator. We applied. You know, Josh
  207. 06:15calls me and I'm like in Austria
  208. 06:16watching some opera show. He's like,
  209. 06:18"Oh, we got an interview. We got an
  210. 06:19interview. We have to come." I flew the
  211. 06:20same day back to London. They ask
  212. 06:22questions that really test whether
  213. 06:24you've got into the details of
  214. 06:25understanding where the problem lies and
  215. 06:28what the why now moment is like why is
  216. 06:31now the right time to build this idea.
  217. 06:34PG explain this to us. They don't think
  218. 06:36about things like what's the probability
  219. 06:37of this idea succeeding. They just want
  220. 06:38to know the probability is bigger than
  221. 06:40zero. Even if it's 1%, but it's a huge
  222. 06:41idea and you're a good team, they'll
  223. 06:43fund you. I'm aware that the company
  224. 06:45we're doing right now, right, it's
  225. 06:46either going to make me like $50 million
  226. 06:48or zero cuz like exchange is like it's
  227. 06:50not like a 10 mill business. Like it'
  228. 06:51never be a 10 million business. It's
  229. 06:53either zero or huge. And they said, "Is
  230. 06:54this a huge idea?" And these guys the
  231. 06:57right people to do it. The next day uh
  232. 06:59we got the offer and then we like okay
  233. 07:01and now that we have funding we can
  234. 07:02probably build it. But building in
  235. 07:04fintech is always tough because you
  236. 07:06can't launch something and if it breaks
  237. 07:07sorry to your customers, right? That's
  238. 07:09like a real breach of trust. The hardest

  239. The Exchange Launch That Almost Broke Us

  240. 07:11day, it was during YC actually. We'd
  241. 07:14actually launched the exchange
  242. 07:16internally just to YC. We were kind of
  243. 07:18forced by our partners to launch early
  244. 07:20cuz they were like, "You need to do this
  245. 07:21otherwise you'll never get user
  246. 07:22feedback. Just just do it right right
  247. 07:24now." I like very jetlagged. So, I work
  248. 07:26with 3:00 a.m. My co-founder was there
  249. 07:28and he's like, "Oh man, the exchange has
  250. 07:29blown up." We looked at everyone's
  251. 07:31result like somebody was plus $1
  252. 07:32million, somebody was - $1 million. We
  253. 07:34like, "Oh man, we only gave them like
  254. 07:36$100 to play with. Like, how has this
  255. 07:37happened?" So we had to basically spend
  256. 07:39all day reconstructing what had
  257. 07:40happened, figuring out how much money
  258. 07:42everyone owed and how much they didn't
  259. 07:44owe, reimbursing some people. That was
  260. 07:46the first time we took a loss as a
  261. 07:47company. We we had to say, "Oh, we're
  262. 07:48sorry. It says that you're minus $100,
  263. 07:50but we don't think this is right. We'll
  264. 07:51just give you $100." Luckily, it was
  265. 07:53still small scale. It wasn't like a big
  266. 07:55loss for us. The issue was it really hit
  267. 07:57home how difficult it is to build a 24/7
  268. 08:00perfect fully available system that
  269. 08:03keeps track of if you run something
  270. 08:0424/7, like anything can go wrong
  271. 08:06anytime, right? lightning bolt can
  272. 08:07happen, fire in the data center,
  273. 08:09whatever. We didn't sleep properly for
  274. 08:10days after that cuz we were like, we
  275. 08:12don't want this to happen in life,
  276. 08:13right? Cuz if we do, it's game over for
  277. 08:15us in exchange. I think the reason the
  278. 08:16partners made us do it is to make
  279. 08:18basically make us grow up and realize
  280. 08:19the gravity of the situation we were in.
  281. 08:21That was a really tough time. Both the
  282. 08:23best days of our life and the worst days
  283. 08:24of our life. We were working all the
  284. 08:26time, like 100 hours a week, very
  285. 08:27focused, uh very frenetic.

  286. Raising at a $95M Pre-Revenue Valuation

  287. 08:30You know, there's some misconceptions
  288. 08:31maybe about how fundraising happens in
  289. 08:34Silicon Valley. It's very quick. If the
  290. 08:35check size is less than 500K, typically
  291. 08:37it's a 30-minute meeting and you get the
  292. 08:40decision like on the call or just after.
  293. 08:42If it's kind of a bigger check, then we
  294. 08:44had a first meeting and then a second
  295. 08:45meeting in person which was, you know,
  296. 08:47both for 30 minutes, let's say roughly.
  297. 08:48And day one, we had a bunch of angels.
  298. 08:51We got some money and then we stopped
  299. 08:53taking angel money. Yeah. Then it was
  300. 08:54about the bigger funds. So, you know, we
  301. 08:56had two major funds. One was General
  302. 08:58Capitalist, one was next suspension
  303. 08:59partners round 95 million valuation. We
  304. 09:01weren't making any revenues. We were
  305. 09:02pre-revenue. The only point in raising
  306. 09:05venture money is if you can be massive,
  307. 09:06but you have to be at like the huge
  308. 09:08scale, then a VC will find it very hard

  309. Silicon Valley vs London: A Different Money Mindset

  310. 09:10to say no. And I think you guys are
  311. 09:12based in San Francisco. What's very
  312. 09:14interesting for me kind of being in
  313. 09:15London for a while, now we're in New
  314. 09:17York. I think London, New York, people
  315. 09:18are very concerned with how much money
  316. 09:20someone has, how much money they make,
  317. 09:22how much money they have in their bank
  318. 09:23account, how much money they're going to
  319. 09:24make in the future. Everything's about
  320. 09:26money. San Francisco, people really, I
  321. 09:28think, don't talk about that as much or
  322. 09:29don't think about it as much. They're
  323. 09:30much more concerned with, you know,
  324. 09:32impact, that kind of thing. And it was
  325. 09:34really useful to live in San Francisco
  326. 09:35for like 4 months. HFT strategies don't
  327. 09:37lose money, right? Like you can't even
  328. 09:38lose money doing HFT. If you lose money
  329. 09:41on a particular day, you get like an
  330. 09:42email from your boss like what what the
  331. 09:43hell happened. Silicon Valley approach
  332. 09:45is like, you know, let's try and make
  333. 09:46something that's going to make a billion
  334. 09:47dollars in 5 years time, but don't even
  335. 09:48think about the money, right? It's like

  336. What's Actually Broken in Traditional Markets

  337. 09:50not even on the scale, which is like a
  338. 09:52new way of thinking. That was a nice
  339. 09:54part of being in San Francisco. You what
  340. 09:56we wanted to do is make sure everyone
  341. 09:58trades on the same equal playing field,
  342. 09:59level terms. If you want to buy Tesla,
  343. 10:00Treasure trades on NASDAQ exchange, but
  344. 10:03the interface is through Robin Hood and
  345. 10:04there's another intermediary which is
  346. 10:05called a clearing house which basically
  347. 10:07does the risk management and settlement,
  348. 10:09right? It's that intermediation, three
  349. 10:11separate companies involved in doing one
  350. 10:13trade that should really just be done by
  351. 10:14one company that's as most efficient as
  352. 10:16possible. That's really what we're
  353. 10:17offering on QX. Our pricing is
  354. 10:19completely transparent, right? So, we
  355. 10:21don't make money from this like profit
  356. 10:23share agreement. We just make money from
  357. 10:25fees. Our fees are as low as possible.
  358. 10:26We actually give a lot of our fees back
  359. 10:27to users if you kind of refer your
  360. 10:29friends or whatever. It's similar to
  361. 10:30Stripe if you want like a direct
  362. 10:31comparison. Stripe really reduced the
  363. 10:33frictions when it comes to doing
  364. 10:34payments. We're reducing the frictions
  365. 10:36when it comes to trading. And so much
  366. 10:38money trades through financial markets
  367. 10:39and days in ways that people don't even
  368. 10:40understand that even if you make small
  369. 10:42improvements, they have massive
  370. 10:44downstream impact. I think the best

  371. Advice to Young People in High-Paying Jobs

  372. 10:45founders always have that, you know,
  373. 10:46that the company they're working on is
  374. 10:48their life's work, right? Like they want
  375. 10:49it to be their legacy. It's more than
  376. 10:51just money for them. And I was ready to
  377. 10:53reach that stage where I was no longer
  378. 10:55just thinking about the money. You know,
  379. 10:57there's an element of me that's you
  380. 10:58doing the current company for the money,
  381. 10:59but there's also an element of, you
  382. 11:00know, we want to go out there and be the
  383. 11:02change in the world that we want to see.
  384. 11:03And here's a very obvious change that I
  385. 11:05see now that I think not a lot of other
  386. 11:06people can work on. Is this what you
  387. 11:08want to tell your kids that you spent
  388. 11:09your life doing? Do you think this job
  389. 11:10will still be around in 5 7 years time?
  390. 11:12If you're still a young person, you
  391. 11:14should be optimizing for learning and
  392. 11:15optimizing for growth, not optimizing
  393. 11:17for how much money you're making right
  394. 11:18now.
This Ex-Quant Had to Quit Wall Street to Build a 24/7 Stock Exchange | QFEX, Annanay Kapila — Transcriptly