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More competition in the space!

https://quantiacs.com

Just heard about them on twitter today. Sounds like they are currently more focused on futures. Anyone every heard anything about them?

14 responses

No reason one couldn't develop a strategy and then let it out to every crowd-sourced fund start-up on the planet. If I understand the Quantopian approach correctly, one would be free to use their resources and they would have no problem with your IP being used as you see fit. Or maybe Q fund managers will have to sign some paperwork, stating that it's kinda, sorta their IP, but, well, not really. Otherwise, "Hey, look, great performance of my $25M Q fund algo over the last six months. I'll license it to you, if you want. What do you say?" Seems like Q will need some sort of exclusive rights, no? Otherwise, they will be competing, with strategies going over to the competition.

I signed up and took a tour of Quantiacs. They have some stocks and mostly futures. You need to download their toolbox and upload your strategy. Only supports daily data (not minute data). From all looks, it does not look as advanced as Quantopian. However I must admit that their contest awards top 3 algos with 1 million, 750K and 500K which is a lot. Also the algos there look more genuine with winning sharpe ratios around 1.5.

It would be interesting to understand where Quantiacs and others are getting their capital, for contests, etc. I understand the Quantopian approach of going after institutional funds, to be able to scale to $10B. But I'm wondering if there are other pools of capital out there? Smaller, more speculative pots of money? If they aren't targeting the institutional pure alpha hedge fund market, then they wouldn't be competing with Quantopian, right? The guidance I've seen on this forum is that there's just no market for "beta" since it is a commodity, but might there be a market for speculators?

They also allow you to program with Matlab. Maybe Q will offer something like this in the future?

https://quantiacs.com/For-Quants/Tutorials/MatlabToolbox.aspx

Hmm. Matlab is pretty expensive, for a commercial license. How would that work?

The realistic Sharpe ratio defiantly appeals to me. The money awarded is really the same. They give you 10% of the profits so on a million account is would be the same as if you kept all the profits from a 100,000 just pointing out the obvious.

Grant,

Looks like quantiacs will allow you to upload your .m file. I'm not sure if they are converting it to C or if they are running the code through a commercial license (I'm not even sure who the broker is--IB, I assume). It seems that the quant will incur the costs of a Matlab license and all of the associated tool boxes.

If I use my "home" edition of Matlab ($150), will I be violating any terms? I guess I might be..

Jamie/Grant - see http://www.mathworks.com/products/matlab-home/
Their webpage even says: "I can use MATLAB to model stock markets and analyze personal investment plans."

You're probably ok if you're just doing it "for you", or as a hobby as it states.
But, if you're in business for this, well, pony up pro license.
But you make the determination :). I'm no EULA expert.

Same goes for the Mathematica Home version too.

@Simon: Thanks for sharing! From a user's perspective, competition is a good thing.

While I intend to play around with Quantiacs' system, I have found one significant difference between Quantopian and Quantiacs. Quantopian promises to keep your content (algorithms) private, and to not use them without our permission. Look at the terms of service, under "Proprietary Rights":

Unless you choose to share your Content, your Content will remain
private. Quantopian will not review, share, or otherwise make use of
private Content except as specifically provided in our Privacy Policy
or this Agreement.

However, if you look at Quantiacs User Agreement (under "License to Quantiacs"), you will learn that:

While you retain ownership of all User Content you post or submit to
Quantiacs, you grant Quantiacs, as well as its Related Parties (as
defined below), a non-exclusive, transferrable, sub-licensable,
worldwide, royalty-free, perpetual and irrevocable license to use,
reproduce, distribute, create derivative works of, display, import or
otherwise exploit your Public Content in any form, media, or
technology, whether now known or hereafter developed.

This means that if you share your best algorithm with them, they can copy it, sell it, or use it themselves. This is another reason to stay at Quantopian.

They are a two men company that can use your algorithm as they wish without any real evidence they can deliver their promises. It is still worth to have a look. How is the performance of their platform? Their contest rules seems way more realistic to produce a money making algorithm.

This means that if you share your best algorithm with them, they can copy it, sell it, or use it themselves. This is another reason to stay at Quantopian.

That's not quite what their terms of use says. What it says is pretty bad, but it's not exactly that. ;-)

They reserve the right to make public all sorts of performance information about your algorithm, even without your consent and when you haven't publicly shared it, and they even appear to reserve the right to trade money with your algorithm, again apparently without your having consented or publicly shared it. All they appear to promise is that they won't actually read your source code without your permission, and that even appears to go out the window if/when they want to trade money with your algorithm, in which case they reserve the right to look at the code.

Proof quotes from their terms of use:

The section you quoted refers to Public content, which they define earlier as:

...simulated track records and other information pertaining to a System submitted to Quantiacs, including equity curves, sharpe ratios, margin to equity ratios, and other measures of performance and risk, as well as computed position sizes, historical orders and exposure and other reports, statistics and information which Quantiacs may, in its sole discretion, deem appropriate to promote or describe a System or compare it to other Systems (all of which measures, reports, statistics, information, descriptions and comparisons, other than a User’s Private Content, are deemed “Public Content” for the purpose of this Agreement)

They also say:

Quantiacs may publish Public Content on Quantiacs’ website and elsewhere, and make the System available to the public to trade over Quantiacs’ platform.

And finally:

Furthermore, in order to assess the risks associated with any System, or otherwise evaluate a System or provide Services, it may become necessary for Quantiacs or its Related Parties to view Private Content, and you hereby consent and agree to the same.

So yeah, the rights that Quantiacs asserts over anything you upload to their site are much more broad than the rights that Quantopian asserts. We look at your algorithms' exhaust to evaluate them for inclusion in the fund; we may in very rare cases look at your source code if it is necessary to do so to protect Quantopian's security or stability (realistically, that happens very rarely, and I don't think we've ever looked at a live-trading algorithm without its owner's consent); and with your consent we will look at your code if we need to when you ask us for support.

Disclaimer

The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by Quantopian. In addition, the material offers no opinion with respect to the suitability of any security or specific investment. No information contained herein should be regarded as a suggestion to engage in or refrain from any investment-related course of action as none of Quantopian nor any of its affiliates is undertaking to provide investment advice, act as an adviser to any plan or entity subject to the Employee Retirement Income Security Act of 1974, as amended, individual retirement account or individual retirement annuity, or give advice in a fiduciary capacity with respect to the materials presented herein. If you are an individual retirement or other investor, contact your financial advisor or other fiduciary unrelated to Quantopian about whether any given investment idea, strategy, product or service described herein may be appropriate for your circumstances. All investments involve risk, including loss of principal. Quantopian makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances.

Jonathan - Thanks for the clarification that Quantiacs was referring only to "Public Content". (This is why I will never be a lawyer!)

They don't have a method to calculate drawdown

Have any of you heard of this company coming up around the horizon?

http://www.builtinchicago.org/2017/01/25/alpha-labs-crowdsourced-high-frequency-trading