Few Initial Concerns
sd545770
Posts: 13
Hello,
I like to clarify the following:
* Is my code private? Is it private when I license it? Is this audited by an external party?
* Can I live trade through Interactive Brokers?
* Are there any chargers / costs?
* What is the difference between the version?
* How do I get access to "CQ Research Partners" for free?
* Also can you Open Source the technology like some of the other competitors?
Suminda
Comments
Hi Suminda,
Can I have Elite access?
In Quantopian to license and algo you do not have to disclose the code of the algo. Perhaps you have can have a similar model.
You can send an email to customer_success@cloudquant.com to request an upgrade.
Hi Suminda:
Regarding privacy of code take a look at: "Your Algos are Your Private Property on CloudQuant"
The short answer is absolutely yes.
Can you live trade through interactive brokers?
The short answer is no. We operate the algos on the CloudQuant platforms in accordance to our stated business model.
* Once a researcher requests that we fund their strategy, we will review the simulation performance report. If the algo is selected for licensing, we provide the client with a proposal to enter into a mutually beneficial profit-sharing licensing agreement. When both parties agree to these terms we will fund the strategy with our own capital.
* Licensed and funded trading strategies are then operated on our own technology, with full oversight from our risk department, professional traders, DEVOPS team, and trading management.
* Our licensing partner will receive royalty payments on any net trading profits on a monthly basis.
* The licensing partner does not need to provide any of their own capital, and they are not liable for any trading losses.
Are there any chargers / costs?
Not for when you are working in our online platform. Everything is free on our web.
Once we mutually agree to a license agreement for any algo you develop then the license agreement clearly states that the the payments you receive are on net profits. Net is a simple way to say that some costs are allocated to the running of an algo. These include market data and other tech fees, and commissions we have to pay for execution and clearing.
What is the difference between the version?
Most of this of these are documented in our product matrix.
How do I get access to "CQ Research Partners" for free?
Great question. We are looking for you to progress through using CQ lite to learn some basics first. Once you have run a few backtests and have gained some experience then you will be eligible for an upgrade to CQ Elite and all it offers. Based off the questions you are asking I would imagine that this will happen quickly.
To gain access to the CQ Research Partners we want to see a number of things including success using CQ Elite, need to access the backtesting system through an externally connected API, and lastly a legal agreement. The legal agreement protects our data providers and us from intentional and unintentional misappropriation of data that researchers can access through the APIs. In short, we want to discuss this in depth with you after you have some experience with our backtesting engine.
Also can you Open Source the technology like some of the other competitors?
We believe that we are the best and only getting better. Our start as a trading firm means that we have the trade execution and experience to get algos into production and trading at scale. Our latest $15M funding proves that.
What competition?
As for Open Sourcing our backtest engine, probably not any time soon. We also won't publish to the public our data sets as that would violate our license agreements with our data providers. You can only access that through our system.
We are discussing other parts of our system, and especially starting strategies that may become open source targets in the near future.
There are a number of reasons for this. No regulated entity is going to allow an algo to run that they have not vetted in accordance with appropriate regulations.
Once we are in the funding process we will be working as partners. In that process we will see some of your code with the intention of making sure it works well with the pre-trade risk controls and isn't violating exchange rules, and is able to access the market in ways that drive profitability. This will all be disclosed in the license agreement and will be done together. Until you request us to fund your algo, your code is completely private to you alone. But if we are going to place million dollar bets, then will work together to make sure that the algo works best for both you and CloudQuant. Remember that the backtesting algo and the running algos often differ because one is backtest and one is live production trading.
Another issues that comes ups is if you do not fund your effort is wasted without being able to live trade your own account.
Also I guess you can find ways to see if risk and rules are not violated without looking into the code.
I see what you mean. However consider the basic math.
In the announcement we just made where we are funding an algo for $15M the algo creator will receive aprox 10% of all net profits without risking any of his own capital.
* Downside = 0% risk. Cost = time
If his algo makes 10% net profit this year, he will pocket $150,000 at 20% he will make $300,000
* Upside unlimited, Cost = time
You may be able to self capitalize your own trading algos. In that case your downside is much larger. And your cost will also be much larger. Most people don't have access to that level of capital. I hope you do. If you don't then we will gladly work with you until you do.
We aren't depositing money into your account to trade. Our business model is for us to execute your trading strategy with proper risk, oversight, trade execution, compliance on CloudQuant infrastructure. This includes full disclosure on what we are doing with our license partners so that their share of the profits are known.
Anyone wishing to have a large scale allocation needs to be able to work in partnership.
Say if one sped some time on and algo and for some reason it does not get funded then the effort is wasted. If we have the option to trade it on our own then it is a plus point.
I believe you can do the vetting through simulation code analysis without an actual person looking at the code.
Hi sd,
Welcome to CloudQuant!
First, I have to agree strongly with what td has said about CloudQuant forming partnerships with their crowd researchers. Morgan's podcast nicely summarises equity trading as 3 steps: the prediction step, the portfolio construction step, and the trade expression step. I think I have something to offer for the first two steps, but confess to not having a clue about execution, until I joined CloudQuant.
Second, I can assure you that Quantopian has a due diligence process, in which they will want to know your underlying economic hypothesis. I doubt any firm, for regulatory reasons, would be able to trade an algorithm as a 'black box.'
Finally, please note that CloudQuant is funding strategies at scale without a long out-of-sample testing period. You will have observed how devastating it can be if a company suddenly announces that it no longer wants exposure to a certain risk factor, thus undoing months of hard work.
My advice is to be open, and view it as a partnership.
How long does the funding process take, post the request? A tentative timeline and various steps/ considerations involved would give an idea of what goes along in the process.
I'm glad to answer the question about the length of the funding process. It really depends on the strategy. But normally I would say less than 1 month if everything goes well.
There're several steps before reaching the final line:
1. First, we need to check the request and back-tests to see the potential of the strategy. If everything looks fine, we can proceed. Or we may reach out to you and discuss about some improvements that can be done on your side to get a better result.
2. Second, if your strategy has the potential to be funded, we'll sign a mutual NDA contract to secure your IP and strategy. Starting from here, we'll copy your code in our server and discuss further with you to improve them and make them running on our internal live market test as well as CQ platform.
3. Then, after running the strategy for a while, live daily in the forward testing environment, we may evaluate the performance and the capacity of the strategy. As soon as we see fit, we'll get it right on track into production where we'll give you a certification of funding and sign some files for the profit shares.
Usually, it may take about one week for phase 1 and phase 3, and at least two weeks in phase 2 where we focus on improving and realizing the strategy in our trading platform.
But still, if the strategy built works really well, it might only take 2 weeks. We're trying our best to make this process as smooth as possible and will sure faster the process and pay you back for your talent.
Thanks a lot, this is really helpful. If we don't hear back for 10 days from Fund My Strategy, does that mean, the strategy is not good enough? Do we get a confirmation if you are going ahead or dropping off the idea?
You should receive an immediate response. I will follow up for you.
Paul