Solving the Almgren Chris Model

1 · Dean · June 6, 2024, 5:30 a.m.
The Almgren Chris model from Optimal Execution of Portfolio Transactions is the most well known optimal execution model and provides the foundational math about how to think about trading some quantity of an asset. This blog post goes through the math and how we set the problem up and arrived at the various solutions. Enjoy these types of posts? Then you should sign up for my newsletter. I first encountered the Almgren Chriss model in my initial PhD year through a Microstructure and Machi...