QuantConnect, a marketplace for the quantitative trading community, announced the launch of free trial periods on Alpha Streams strategies last month, allowing institutions to test algorithmic trading strategies prior to licensing.
Jared Broad, CEO and founder of QuantConnect, spoke with Benzinga about what the Alpha Streams free trial period means for the future of the burgeoning crowdsourced alpha movement.
Launched in 2011, QuantConnect is a platform for building trading algorithms, where quants signed into the community publish trading algorithms usable in assets including equities, futures, options, forex and crypto.
“QuantConnect is an algorithm development community. We are now composed of nearly 100,000 quants, engineers and scientists spread out all over the world," said Broad. "They design algorithms on our website, and we provide them with financial data and other tools to generate alpha."
A few years ago, the firm was approached by high-level proprietary trading firms and hedge funds regarding increased accessibility to the marketplace.
“We started having a lot of funds come to us and say that they were interested in accessing the community,” said Broad. “We came up with an idea in 2018 called Alpha Streams, a marketplace where engineers can list their algorithms for licensing, and the hedge funds can browse it; if they find an algorithm they’re interested in, they can license it.”
Now, with free trials, fund managers can test out strategies without purchasing authority, helping bring meritocracy and decentralization to the investment community.
QuantConnect is the only alpha-generating market that enables quants and funds to buy and sell algorithms between each other.
“There’s buyers and sellers," Broad said. "The algorithms have bid prices and ask prices, and so we see that growing into sort of the NYSE of alpha, where you can come in and find strategies for licensing for specific objectives.”
All algorithm trials have an adjustable trial period; after the trial period, licensing costs consist of a monthly subscription fee.
To learn more about QuantConnect and it’s portfolio of products, visit quantconnect.com.