Price of an algorithm for automated trading.

[Unit001]

I wasn't sure if this belongs under psychology or Automated Trading section. How much would you pay for automated algorithm that guaranteed always to preform in all markets sectors and instruments. And allow 100% return a year.

While sale of such an algorithm isn't possible for obvious reason.

How much would you pay?

 

[xiaohu]

Quote from Unit001:

I wasn't sure if this belongs under psychology or Automated Trading section. How much would you pay for automated algorithm that guaranteed always to preform in all markets sectors and instruments. And allow 100% return a year.

While sale of such an algorithm isn't possible for obvious reason.

How much would you pay?

you miss out the 9.99 option

 

[Unit001]

Quote from xiaohu:

you miss out the 9.99 option

You mean zero don't you. That's fair too, your opinion counts as well.

 

[CBuster]

Quote from Unit001:

I wasn't sure if this belongs under psychology or Automated Trading section. How much would you pay for automated algorithm that guaranteed always to preform in all markets sectors and instruments. And allow 100% return a year.

While sale of such an algorithm isn't possible for obvious reason.

How much would you pay?

guartaneed 100% pa? congrats - you've produced a candidate for stupid question on the year award.

you might as well ask "how much would you pay for a machine that turns water into crude oil" or "how much would you pay for access to endless free cash".

bottom line is you are asking for a price tag on unlimited free money....

 

[Unit001]

Quote from CBuster:

guartaneed 100% pa? congrats - you've produced a candidate for stupid question on the year award.

you might as well ask "how much would you pay for a machine that turns water into crude oil" or "how much would you pay for access to endless free cash".

bottom line is you are asking for a price tag on unlimited free money....

not true, market liquidity limits comes to mind

 

[CBuster]

Quote from Unit001:

not true, market liquidity limits comes to mind

lol - no it doesn't. all you say is 100% guaranteed. you mention no liquidity constraints. otherwise the price is totally dependant on the constraint, which you don't even mention.

but let's assume i am somewhat restricted by liquidity. you still qualify that it works for 100% return guaranteed on every stock, sector and market. well, between the global stock, fx, bond and commodity markets, i'm sure i could find enough liquidity to invest, say, $100bn. within 6 months, i am the worlds richest man.

like i said - stupid question.

 

[Corey]

Quote from Unit001:

I wasn't sure if this belongs under psychology or Automated Trading section. How much would you pay for automated algorithm that guaranteed always to preform in all markets sectors and instruments. And allow 100% return a year.

While sale of such an algorithm isn't possible for obvious reason.

How much would you pay?

Depends on scalability, access to capital, and life expectancy...

Theoretically, the price should be infinite ... but this isn't an ideal world and all strategies have scalability decay. If you started this strategy with $100,000 and made 100% a year, you would have more money than the USA GDP in ~28 years...

So, again, it depends on the scalability. Something that returns 100% but can't handle much more than $10,000 isn't worth nearly as much as one that can handle up to $5,000,000.

 

[sjfan]

You are injecting real world concerns into a question that pre-supposes the existence of the finance equivalence of a perpetual motion machine...

To the OP... what is the motivation for this question?

Quote from Corey:

. but this isn't an ideal world and all strategies have scalability decay.

 

[TheStudent]

There is an old saying about how on Wall Street, when a man with wisdom meets a man with money, the wise man leaves with the money and the rich man leaves with wisdom.

No one is going to sell you the keys to the kingdom period. Your hopes and dreams are being preyed upon.

 

[OddTrader]

Quote from Unit001:

While sale of such an algorithm isn't possible for obvious reason.

That's quite true! If its drawdown is relatively large (say -70% yearly), the value would be zero.