Selling my stock picking algorithm to hedge funds/investment firms. Where do I start?

Subscribe

I'm a C++ programmer and my friend and I recently made a nice little trading strategy that was able to gain 5000% over a simulated trading period and in another experiment, turned $5000 into $100,000.

I know hedge funds get hit with scores of these things daily but we've both back-tested our strategy as well as on current live data and they both work well.

I'm trying to sell it to hedge funds, much cheaper than what they're paying their own programmers. Anyone ever heard of hedge funds buying stuff like this from people? Where should I start?

Region

Comments (20)

 
Nov 8, 2009 - 11:09am

We just wanted to make the quick buck and get out...maybe latch on later as consultants. Plus, we don't have enough money to really make something out of it so soon...trading isn't really part of our longterm career interests really. Kind of just want to get it over with :D

 
Nov 8, 2009 - 2:56pm

I don't really know anything about trading, but I am really good with C++ and it would take a good trader about two weeks to learn everything you would need to know to write it yourself.

Ace all your PE interview questions with the WSO Private Equity Prep Pack: http://www.wallstreetoasis.com/guide/private-equity-interview-prep-questions
 
Nov 8, 2009 - 3:02pm

It's mathematically impossible to go from 5k to 100k. That would mean your beta needs to be like 2300%. Even then it's imossible. Imagine finding the highest rising stock and putting all your 5k in that. Even then you would've probably doubled up or tripled up at best, giving you 15k.

Plus the kid has 2 posts and its a new account. Goddang trolls.

 
Jan 29, 2012 - 2:33pm

getyourhandsup:
it was 100k over a simulated 10 years based on historical data

That means this algorithm only makes about 40% annually. Not too shabby, but stating a giant percentage increase without including the time period is just sensationalist.

I realize this is an old post, but I'm trying to do the same thing. I have a few algorithms that I've backtested, and I have no interest in selling these to anyone. Even with a modest starting investment, after a couple of years it would be worth big money. Unless they'd be willing to go pretty huge on the purchase price, I'd just use it for myself.

 
Nov 9, 2009 - 2:57am

sounds like you have no clue what you're doing. so, if you have a PhD from a top tier school in a totally unrelated yet supposedly impressive science or science-y sounding thing and you're able to reference obscure-sounding theorems (eg. Chernkowsky-Yang Conjecture) in your materials, i'd say your chances are good!

 
Nov 9, 2009 - 6:35am

This is awesome. I remember when I was 12 and discovered trading. I actually started out studying computer engineering, and I thought that I would find the holy grail also.

So you back tested your results.

Whats your percentage of "right" in the model?
What is your average capital commitment to each position?

two things:
Slippage
the market's ability to remain irrational longer than you can remain solvent

Start Discussion

Total Avg Compensation

September 2020 Hedge Fund

  • Vice President (18) $520
  • Director/MD (10) $359
  • Portfolio Manager (7) $297
  • 3rd+ Year Associate (18) $269
  • 2nd Year Associate (25) $242
  • Engineer/Quant (47) $236
  • 1st Year Associate (58) $189
  • Analysts (175) $167
  • Intern/Summer Associate (13) $133
  • Junior Trader (5) $102
  • Intern/Summer Analyst (186) $80

Leaderboard See all

1
Jamoldo's picture
Jamoldo
98.3
2
LonLonMilk's picture
LonLonMilk
98.3
3
Secyh62's picture
Secyh62
98.2
4
CompBanker's picture
CompBanker
97.8
5
redever's picture
redever
97.7
6
Addinator's picture
Addinator
97.6
7
Edifice's picture
Edifice
97.6
8
frgna's picture
frgna
97.5
9
NuckFuts's picture
NuckFuts
97.5
10
bolo up's picture
bolo up
97.4