Blind Rental of Stock Recommendation Streams?

J

jabowery

The business model of most of the attempts to "rent" stock recommendations that I've seen involve providing one's algorithm to some trusted third party which runs the algorithm and provides the recommendations to the second party. There is obviously an enormous amount of damage that such a trusted third party would suffer if even _suspected_ of violation of that trust, hence we are admonished to discount the risk of such a violation as being paranoid or something.

Of course, such admonishments are, if not utter nonsense, then less than serious about the business risk posed.

So, obviously (at least to me) there is a service category that permits the algorithm to run on the first-party's secured environment while retaining the bidding war between traders for exclusive access to the recommendation stream.

What are the names of the companies that offer this third party service and what is such a third party service called in the industry?
 
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I do not see why such business even exists. If the algo is good, it should be used by the inventor to make money directly instead of renting out. When he decides to rent out to collect subscription, it means the algo is useless, which means only foolish would pay the rent.
 
That argument applies to existing businesses that run the algorithm for the developer and then rent out the algorithm's recommendations. I'm not going to try to defend the manifest existence of such businesses to you. Your response is to another question -- one that I didn't ask.
 
jabowery said:
The business model of most of the attempts to "rent" stock recommendations that I've seen involve providing one's algorithm to some trusted third party which runs the algorithm and provides the recommendations to the second party. There is obviously an enormous amount of damage that such a trusted third party would suffer if even _suspected_ of violation of that trust, hence we are admonished to discount the risk of such a violation as being paranoid or something.

Of course, such admonishments are, if not utter nonsense, then less than serious about the business risk posed.

So, obviously (at least to me) there is a service category that permits the algorithm to run on the first-party's secured environment while retaining the bidding war between traders for exclusive access to the recommendation stream.

What are the names of the companies that offer this third party service and what is such a third party service called in the industry?
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I'm curious to see the responses to your question.
Personally, I've never heard of such service, but I'm not saying it doesn't exist.

Btw, Where did you hear about this?
 
I asked an old associate who has been doing algorithmic trading (using his own money and doing quite well at it) about this and he told me that when he attempted to offer his algorithm's recommendations to investors he discovered the SEC has cracked down on any form of stock recommendation business to the point that, practically speaking, you need a fund of tens of millions of dollars to make it profitable.

This may help explain the abandonment of this business area by Quantopian.
 
schizo said:
Just what the hell is "stock recommendation streams"?
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Imagine a bunch of different websites each of which is shows a real time scrolling text where each line is an order for a stock (buy/sell quantity). You can go to any of these websites you want and feed the orders into your broker but you can't see the undelayed real time scrolling text unless you are the one paying the high bid for access.

As for "blind" -- unlike Quantopian -- you can't get access to the algorithm generating the buy/sell recommendations.
 
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