QuantConnect has launched a new competition, Alpha Five, allowing hedge funds to solicit “designer” Alphas from the crowd.
QuantConnect, an open-source algorithmic trading platform, provides its community of over 85,000 quants access to financial data, cloud computing, and a coding environment where they can design, build, and live trade algorithmic trading strategies. For the first time, institutions can tap into the power of the crowd to solicit specifically designed trading strategies.
Quants will submit their strategies for not only part of a client-sponsored USD27,500 cash prize pool, but also the potential to be licensed by institutional investors for additional compensation.
The competition, which ends on 31 October, gives quants the opportunity to submit their alphas each day for one of the following five pre-defined universes: Energy, Precious Metals, Technology, Treasuries, or Volatility ETFs. Unlike other trading competitions, Alpha Five will allow participants to build their strategies utilising the resources of the entire QuantConnect ecosystem, including its wealth of alternative data sources, enabling a diverse and powerful range of algorithm development.
Once QuantConnect receives the submissions, the algorithms will be judged by assigning a score based on the live trading Sharpe ratio and the realism of the model. Then, after the deadline, QuantConnect will select a first-, second-, and third-place winner for the highest-scoring algorithms in each basket. Upon conclusion of the judging process, QuantConnect’s hedge fund client will decide whether to license one of the winning alphas. Alphas that are not licensed in this competition will be available for live trading and for any hedge fund to license on the Alpha Streams marketplace.
“This is the first time alpha development has been crowdsourced to a community in a competition such as this; with the alpha criteria set by the hedge fund client, quants have the chance to win prizes and, if their alpha is selected, a high probability of licensing,” says Jared Broad, CEO of QuantConnect. “It’s an unprecedented and empowering opportunity for quantitative traders to get their algorithms in front of a highly interested quant fund, while maintaining control of their intellectual property.”
