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Can't find the original comment but somebody wrote here time ago that some HFs let you run on their infrastructure (keeping 85/90% of any profits) if you can pr

Can't find the original comment but somebody wrote here time ago that some HFs let you run on their infrastructure (keeping 85/90% of any profits) if you can prove to have a valid strategy. Just out of curiosity, I could not find any other information about this, is it a thing that actually happens?

sjbase 10y ago
Zipline (from OP's article) was created by a company that does something like that: https://www.quantopian.com/faq https://www.quantopian.com/faq
__d 10y ago
There are places (like Quantopian, but also more professionally-oriented) that will not only provide infrastructure but also capital if you come to them with a trading algorithm that does well on back tests. The next step down are firms that'll give you a platform including hardware and software for the "infrastructure" bits: often called an "algo container", but lots of brokers have an API you can use to avoid needing to write feed handlers, etc. eg. Pico. Then there are heaps of providers who'll rent you servers, connectivity, rackspace, etc. You do all the software. Lucera is a trading-oriented "cloud" provider. OptionsIT or Fixnetics are infrastructure providers. Or you just go straight to the data centers -- any decent finance-oriented datacenter will have a POP for most of the venues, and you can just cross-connect. No relationship with any of the firms named -- just examples off the top of my head.
brianwawok 10y ago
Yes it is. Small arrangements like this all over Chicago. Perhaps NY also. The big issue isnt actually infa it's capital. If you want to trade big you need a million bucks or something on hold with the exchange. How do you borrow a mil to park at an exchange? The guys mentioned above.
lordnacho 10y ago
Yep. I am currently doing this, but under an NDA, at an HFT firm. 80% of profits seems a bit rich, though. If they're supplying top spec colo servers, a super fast network to connect them, and people to stare at it, I'd say something a bit lower (but still pretty chunky) would make more sense. I suppose the key for them is they have a bunch of existing infrastructure that pays for itself, so any extra cream is good. Also they have capital sitting around, so why not? The strategies have to be more than unusually profitable, though. I don't think I've seen a down day in the 3 months I've been sitting here, so your average trend following sharpe ~1.5 or so ain't gonna impress people.

sjbase 10y ago

Zipline (from OP's article) was created by a company that does something like that: https://www.quantopian.com/faq https://www.quantopian.com/faq

__d 10y ago

There are places (like Quantopian, but also more professionally-oriented) that will not only provide infrastructure but also capital if you come to them with a trading algorithm that does well on back tests. The next step down are firms that'll give you a platform including hardware and software for the "infrastructure" bits: often called an "algo container", but lots of brokers have an API you can use to avoid needing to write feed handlers, etc. eg. Pico. Then there are heaps of providers who'll rent you servers, connectivity, rackspace, etc. You do all the software. Lucera is a trading-oriented "cloud" provider. OptionsIT or Fixnetics are infrastructure providers. Or you just go straight to the data centers -- any decent finance-oriented datacenter will have a POP for most of the venues, and you can just cross-connect. No relationship with any of the firms named -- just examples off the top of my head.

brianwawok 10y ago

Yes it is. Small arrangements like this all over Chicago. Perhaps NY also. The big issue isnt actually infa it's capital. If you want to trade big you need a million bucks or something on hold with the exchange. How do you borrow a mil to park at an exchange? The guys mentioned above.

lordnacho 10y ago

Yep. I am currently doing this, but under an NDA, at an HFT firm. 80% of profits seems a bit rich, though. If they're supplying top spec colo servers, a super fast network to connect them, and people to stare at it, I'd say something a bit lower (but still pretty chunky) would make more sense. I suppose the key for them is they have a bunch of existing infrastructure that pays for itself, so any extra cream is good. Also they have capital sitting around, so why not? The strategies have to be more than unusually profitable, though. I don't think I've seen a down day in the 3 months I've been sitting here, so your average trend following sharpe ~1.5 or so ain't gonna impress people.