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Fascinating algorithms: Quantopian brings black-box trading to the masses

A new service for those that know how to do the math but lack the infrastructure and data

Jan 23, 2013 @ 3:05 pm

By Davis Janowski

+ Zoom
(Quantopian)

Those on The Street should be quaking in their Birkenstocks. Today, Quantopian was launched.

It is the first browser-based algorithmic trading platform for…anyone really. Anyone with the math chops and knowledge of finance to take advantage of it that is.

The startup emerged from beta Wednesday and provides tools to create and optimize trading algorithms in, as they put it in their prepared statement, “an open and transparent environment.”

I'm looking forward to learning more but suffice it to say that in the days gone by access to data and the need for a trading infrastructure hobbled those interested in the prospect of pursuing their own algos.

Added to that, of course, is the ability to code and the requisite mathematics abilities (hence the number of astrophysicists that have immigrated from eastern Europe and Russia over the years and landed at big Wall Street firms as quants).

The site and its tools provide the data needed for backtesting and the necessary infrastructure to support algo development.

Quantopian states in their materials that members retain full ownership of their intellectual property too.

Part of the toolset is Quantopian's Zipline open source backtesting application.

The Quantopian added in the prepared statement that they plan to introduce live trading later this year as well.

Oh, and for now the site and its tools are free.

It sounds like, from the site's FAQ that once a live trading platform has been built that that feature will be avalable for a subscription fee as might support.

I'm usually loathe to run canned quotes but these are informative if not entertaining:

    "For way too long, Wall Street has kept quantitative finance to itself by hoarding information and providing little transparency or accountability," said John 'Fawce' Fawcett, founder and chief executive officer of Quantopian. "At Quantopian, our goal is to dispel that secrecy and grow the quant community by a thousand fold. We welcome talented people from around the world into our community by providing access to the data, infrastructure and mentorship necessary to participate."

    AND

    "Algorithms play an increasingly interesting and important role in many areas," said Andrew Parker, principal at Spark Capital. "For most people they're not well understood. What makes Quantopian so interesting is that they're connecting large new classes of programmers, scientists and investors with the ability to create and take advantage of the most valuable algorithms. It's very exciting stuff that will have a market-changing impact."

The company has received funding from Spark Capital and GETCO.

For more information and even a short video on how it all works visit Quantopian online.

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