Back to Community
How is 10% fair?

Quantopian is paying 10% of the winnings to the developer of the strategy. If you divide the profit with the effort that went in, the question arises how the 90% is validated when the algorithm is developed from someone else. Just in comparison, you get 70% of sales revenue for an app developed for Apple. How is the 10% justified here?

2 responses

If Quantopian is running their fund like a 2/20 hedge fund, then 10% of what your algorithm makes is basically half of the profit. Quantopian, or their investors, are taking all the financial risk running your algorithm with their money. In the case of the Apple Store, Apple is taking a referral fee. There isn't really any risk on their part.

You are not required to license your algorithm to the big red Q. You can trade it yourself, license to someone else, start your own hedge fund, use it to convince someone to hire you as a quant, etc, etc, etc.

IMHO it's entirely reasonable (and I have been developing algos for 15+ years). It's not too easy to raise money yourself and handle all the legal stuff unless you have serious connections and Q is taking the risk here as you are not the one running the fund.

I even assume they don't require exclusive rights (this is a big question mark for me) so you can get both worlds if you can raise funds yourself.