QuantConnect has launched free trial periods for all algorithms listed on the Alpha Streams alpha marketplace. Institutional clients can now try out the algorithms on Alpha Streams and prove their theories before paying to license them for a longer period.
QuantConnect provides its community of quants access to financial data, colocated infrastructure, and a coding environment where they can research, backtest, and live trade algorithmic trading strategies. Quants then have the opportunity to make these alphas available for licensing by Alpha Streams clients, which comprise leading US quantitative hedge funds with an aggregate AUM of more than USD50 billion.
During a free trial, portfolio managers may jumpstart the process of trying out an algorithm by conducting low-volume or paper trading without having to first gain purchasing authority. This novel approach to licensing alpha allows institutional investors to rapidly iterate and explore alpha from the QuantConnect community. Going forward, all Alpha Streams client funds, including a recently signed US quantitative hedge fund with more than USD10B AUM, can participate in these free trials.
All algorithms will have a default 30-day trial; however, the author is able to edit the length of their algorithm’s trial period. Authors can set the trial period from a minimum of zero days to a maximum of 90 days per strategy. All trial periods are automatically applied when a fund licenses an algorithm, and after the free trial period, the licensing cost consists simply of a monthly licensing fee, with no profit-sharing or lock-in.
“We see free trial periods as a significant win-win for quants and institutions,” says Jared Broad, CEO and founder of QuantConnect. “Offering free trial periods will lower the barrier to entry for institutions wishing to use quants’ algorithms by giving analysts and portfolio managers the unprecedented opportunity to prove the power of the high-quality algorithms on Alpha Streams before licensing them for a longer period. At the same time, quants will benefit from increased licensing rates.”
“I’ve been building algorithms on the QuantConnect platform for five years, and being able to have my ideas licensed by hedge funds has been awesome,” says Chris Kramvis, Chief Investment Officer of DropShot Capital, who builds strategies on QuantConnect’s platform. “I think adding free trial periods will generate more direct exposure for the community’s strategies, and translate to more licensing revenue.”
This development comes on the heels of several recent successes for QuantConnect. In addition to the signing of a US quantitative hedge fund with more than USD10 billion AUM, the company has seen record levels of user engagement and strategies created on its platform; with its recent competitions, QuantConnect has garnered 350 algorithm submissions and distributed USD35,000 in prizes to the community.
