Prop firm asking for source code and strategy??

This has been lifted directly from the CME's regulations:

" ATS (Automated Trading System)

An ATS is an electronic system or computer software that is programmed to generate and route orders into CME Globex without a specific human action involved in sending or verifying the orders. This type of system is often referred to as a black box. An ATS operator is a person or persons that operate, administer and/or monitor the ATS. Typically, people in the operator role initiate or disable particular algorithms or strategies, or adjust the parameters of the automated program.

An ATS that does not require an individual to initiate or manually confirm the creation of a specific instruction must be assigned, and must transmit into CME Globex, a unique TAG 50 that identifies the person who operates, administers and/or monitors the ATS. If the ATS operator is responsible for multiple trading models, algorithms, programs, or systems which trade the same product, and which potentially could trade opposite one another, then each model, algorithm, program or system must be assigned a unique TAG 50. Any deviation from this requirement must be approved by CME Market Regulation before being implemented.

Some trading entities have assigned groups of individuals that work together to operate and monitor ATSs. For example, a firm may have one person who adjusts pricing parameters, but others who continuously monitor positions or risk and make decisions as to trading size. In these team situations, the individuals may use a single TAG 50 subject to the approval of CME Market Regulation. When registration is required, these team TAG 50s must be properly registered in EFS, as discussed below.
Team TAG 50s may only be used in true team situations. Entities may not bundle all their ATS operators under one TAG 50 if those operators primarily work independently or at different times of the day.

ATS TAG 50 Registration Requirements

CME requires clearing members to register all ATS TAG 50s in EFS if they represent individual members or employees of a member, a clearing member, a corporate member, or a party receiving preferential clearing fees as a result of participating in any special program offered by CME. These membership categories and programs include CME Rule 106.H. (Corporate Member Firm Transfers) members, CME Rule 106.I. (Related Party Employee Transfers) members, CME Rule 106.R. (Electronic Corporate Member Transfers) members (ECMs), CME Rule 106.S. (Family of Funds Transfers) members, Asian Incentive Program (AIP) participants, Emerging Market Partner Program (EMPP) participants, European Incentive Program (EIP) participants, eFX Bank Incentive Program (BIP) participants, CTA/Hedge Fund Pilot Program participants, and the New Trader Program.

The clearing firm must associate each ATS TAG 50 with the name of the person who is directly responsible for controlling the trading of the ATS, and must select the ATS attribute on the registration screen within EFS to indicate that the TAG 50 represents an ATS. Each ATS operator must provide accurate and up-to-date information to their clearing firm concerning ATS TAG 50s in accordance with the requirements described above. The TAG 50 that is registered in EFS must exactly match the TAG 50 that is submitted on CME Globex orders entered through iLink connections. "
 
" I doubt most of the "good fills" I see nowadays are obtained by manual traders... "

Again, this is not true. Please study an exchange's order matching algorithm before commenting further. Resting limit orders are filled according to timestamp for FIFO, and even with PRORATA a designated allotment of resting limit orders are filled according to timestamp BEFORE volume distribution takes place.
 
Quote from bone:

This has been lifted directly from the CME's regulations:
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Interesting material, but doesn't speak to the 'tail-end Charlie' concern you mentioned previously.
 
Hey I'll be quite frank about prop seeker. He sounds like a Zerohedge wannabe, trying to interrogate, and find a heist. Lol to be frank Prop Seeker, we're not here to be the SEC. Aside from that point. From the looks of it some degree of information needs to be disclosed in order to meet regulatory requirements. That's just the fact of the matter. That being said it would only make sense to get a minimum of information on potential risk, size, and timing of a set system. To be frank there are more ways to make money from trading than we could all imagine. Some are more effective than others. But, if you are that picky or whiny about stuff like that. Just get a non-disclosure agreement, except under the circumstances of responsible government, or exchange authorities.

Let's keep it simple, and leave it at a non disclosure agreement. Stop acting like girls, and focus on what's important. That's all I am trying to point out here. If the firm doesn't agree with your non disclosure agreement look elsewhere. Stop making people out to be criminals. It's so frustrating, and annoying to watch. I saw an attorney that pointed out the phraseology of a statement in a case he was losing. No verifiable evidence, but pointing out something a person said. Just to embarrass himself in the end. That's the makings of an idiot who keeps kicking the horse dead. To be frank anyone who HAS TO BE RIGHT. Is generally a un-disciplined, unprofitable, risk on type of trader who end up losing their shirts.

This time I recommend you concede Prop Seeker before you make a bigger fool out of yourself, and everyone who decided to read all your retarded bickering.
 
Quote from alexandercho:

Hey I'll be quite frank about prop seeker. He sounds like a Zerohedge wannabe, trying to interrogate, and find a heist. Lol to be frank Prop Seeker, we're not here to be the SEC. Aside from that point. From the looks of it some degree of information needs to be disclosed in order to meet regulatory requirements. That's just the fact of the matter. That being said it would only make sense to get a minimum of information on potential risk, size, and timing of a set system. To be frank there are more ways to make money from trading than we could all imagine. Some are more effective than others. But, if you are that picky or whiny about stuff like that. Just get a non-disclosure agreement, except under the circumstances of responsible government, or exchange authorities.

Let's keep it simple, and leave it at a non disclosure agreement. Stop acting like girls, and focus on what's important. That's all I am trying to point out here. If the firm doesn't agree with your non disclosure agreement look elsewhere. Stop making people out to be criminals. It's so frustrating, and annoying to watch. I saw an attorney that pointed out the phraseology of a statement in a case he was losing. No verifiable evidence, but pointing out something a person said. Just to embarrass himself in the end. That's the makings of an idiot who keeps kicking the horse dead. To be frank anyone who HAS TO BE RIGHT. Is generally a un-disciplined, unprofitable, risk on type of trader who end up losing their shirts.

This time I recommend you concede Prop Seeker before you make a bigger fool out of yourself, and everyone who decided to read all your retarded bickering.
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So, let me guess... Don was unable to have this thread shutdown, so he called in reinforcements? Give me a break. Take a look at the thread title, Alexander. If you don't like it, move on to another topic.

Propseeker makes some extremely valid points. Don has no need to address them, but if he is so inclined, there is no reason to hide that he has not addressed them adequately to address the valid concerns that exist. There is no valid reason why a firm should need to know details or clues about how I trade (except perhaps my order to fill ratio, to ensure that I don't bog down their system with orders, while generating very little in terms of commission revenue). They can manage their risk perfectly fine on their end, by allowing or rejecting my orders as they arrive.

Any firm with the slightest level of technology can monitor and limit (as needed automatically) my maximum exposure in open positions, maximum exposure in any single security, maximum exposure in unfilled limit orders, maximum exposure for overnight positions, etc. There is zero reasons why a firm should require being tipped off to clues on "what I'm doing".

I would run from such a firm as fast as possible (especially if they, hypothetically speaking, generate additional revenue by offering expensive training classes to supposedly teach "what is working now" in the markets).

I have heard the same rumors as propseeker, from multiple trading acquaintances that are very knowledgeable in the industry, about a certain 'reputable prop firm' that has stolen a trader's proprietary trading strategy for their own use. The topic of this thread is quite valid, and should be carefully considered for any/all successful traders to determine their own risk.
 
Quote from EricP:

So, let me guess... Don was unable to have this thread shutdown, so he called in reinforcements? Give me a break. Take a look at the thread title, Alexander. If you don't like it, move on to another topic.

Propseeker makes some extremely valid points. Don has no need to address them, but if he is so inclined, there is no reason to hide that he has not addressed them adequately to address the valid concerns that exist. There is no valid reason why a firm should need to know details or clues about how I trade (except perhaps my order to fill ratio, to ensure that I don't bog down their system with orders, while generating very little in terms of commission revenue). They can manage their risk perfectly fine on their end, by allowing or rejecting my orders as they arrive.

Any firm with the slightest level of technology can monitor and limit (as needed automatically) my maximum exposure in open positions, maximum exposure in any single security, maximum exposure in unfilled limit orders, maximum exposure for overnight positions, etc. There is zero reasons why a firm should require being tipped off to clues on "what I'm doing".

I would run from such a firm as fast as possible (especially if they, hypothetically speaking, generate additional revenue by offering expensive training classes to supposedly teach "what is working now" in the markets).

I have heard the same rumors as propseeker, from multiple trading acquaintances that are very knowledgeable in the industry, about a certain 'reputable prop firm' that has stolen a trader's proprietary trading strategy for their own use. The topic of this thread is quite valid, and should be carefully considered for any/all successful traders to determine their own risk.
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Funny you say calling in the reinforcements. I don't even know this Don dude, or whatever. I could say the same about you, and say that propseeker called in the reinforcements. But, then again that would be un-called for because there's no verifiable evidence of such. The ranting, and raving going over the same crap, over, and over was absolutely annoying. I got nothing from that discussion besides an immature brat pointing a finger at somebody without any verifiable evidence. If Don says people are free to share information, at their own discretion than that's the way it is. If information is kept private, or they don't ask for that information you should leave it at that. No need to pull a zero hedge microscope on some phraseology, that's what defense attorneys do, and especially when they're losing. If there's a certain degree of regulation that goes into this, than that's the way it is.

If you don't like it talk to an attorney that specialized in finance law, and SEC regulation. If the regulations point towards that, than that's the way it is. If you're willing to still work with a prop firm that asks for a source code. Than get a non-disclosure agreement. Either that, or you don't work with them. Obviously this is a stumbling block to this person in question. Because he probably doesn't have a whole lot of alternative prop firms that are willing to accept him. If his system is "that" important than he should have a patent in place. God, get a brain. If you don't like their ethics fight back with a legal document, patent, or look for alternative firms that don't ask for that information. Stop beating up this dude who has nothing to do with this "firm" in question. Also if he is the owner of that "firm" the OP was mentioning. Than the primary source said that he doesn't ask for source code, which goes against the OP's original point. If that's the case, than that's all there is. Jesus...... It's a waste of time if I have to keep reading two people going back and forth over some point that has already been thoroughly defined.
 
Quote from adadadog:

I have to respond to this. Each time I look at the title, I am irritated by it.

Either the OP got the strategy easy or the strategy is not working one. Easy come and easy go.
Otherwise, when people get their working strategies with tears and sweat, they would not ask this kind of question. Sorry, I have to went.
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I'm confused - did you read the OP? I'm not even involved, just asked a question on behalf of a friend.

I can't really get a straight answer but I have zero clue what you mean by "either the OP got the strategy easy or the strategy is not a working one"... are you trying to troll me because if you are you aren't making sense.

I've pretty much learned that Reg-T accounts it doesn't matter, real prop (where you get a draw/salary) the company pretty much owns you/the strategy so it doesn't matter and bucket shop prop firms it totally varies who asks what and its also discretionary in that they can ask whatever they want and then they can choose to give or not to give you leverage - so its still unclear but I'm pretty sure its a moot point now.
 
Quote from WinstonTJ:

I'm confused - did you read the OP? I'm not even involved, just asked a question on behalf of a friend.

I can't really get a straight answer but I have zero clue what you mean by "either the OP got the strategy easy or the strategy is not a working one"... are you trying to troll me because if you are you aren't making sense.

I've pretty much learned that Reg-T accounts it doesn't matter, real prop (where you get a draw/salary) the company pretty much owns you/the strategy so it doesn't matter and bucket shop prop firms it totally varies who asks what and its also discretionary in that they can ask whatever they want and then they can choose to give or not to give you leverage - so its still unclear but I'm pretty sure its a moot point now.
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Sorry, I read the OP twice. Once when it was posted and now. I guess I forgot that you were posting for somebody else when I posted.
 
Quote from alexandercho:

Funny you say calling in the reinforcements. I don't even know this Don dude, or whatever. I could say the same about you, and say that propseeker called in the reinforcements. But, then again that would be un-called for because there's no verifiable evidence of such. The ranting, and raving going over the same crap, over, and over was absolutely annoying. I got nothing from that discussion besides an immature brat pointing a finger at somebody without any verifiable evidence. If Don says people are free to share information, at their own discretion than that's the way it is. If information is kept private, or they don't ask for that information you should leave it at that. No need to pull a zero hedge microscope on some phraseology, that's what defense attorneys do, and especially when they're losing. If there's a certain degree of regulation that goes into this, than that's the way it is.

If you don't like it talk to an attorney that specialized in finance law, and SEC regulation. If the regulations point towards that, than that's the way it is. If you're willing to still work with a prop firm that asks for a source code. Than get a non-disclosure agreement. Either that, or you don't work with them. Obviously this is a stumbling block to this person in question. Because he probably doesn't have a whole lot of alternative prop firms that are willing to accept him. If his system is "that" important than he should have a patent in place. God, get a brain. If you don't like their ethics fight back with a legal document, patent, or look for alternative firms that don't ask for that information. Stop beating up this dude who has nothing to do with this "firm" in question. Also if he is the owner of that "firm" the OP was mentioning. Than the primary source said that he doesn't ask for source code, which goes against the OP's original point. If that's the case, than that's all there is. Jesus...... It's a waste of time if I have to keep reading two people going back and forth over some point that has already been thoroughly defined.
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Wowza. Where to begin? ok, maybe you aren't a shill for Don, my apologies.

"Patents" for trading systems? Really. Do you think that's what hedge funds do? Goldman Sachs? Not a prayer. Intellectual property such as trading systems are kept very tightly controlled as Trade Secrets (propriety information), and not shared with anyone. I assume you must be aware that a patent application must fully and publically disclose the 'invention' (I know, I've been through the process). That's precisely the opposite of what the successful trader would ever want to do.

"Stop beating a dead horse?" There is a discussion going on concerning "Prop firms asking for source code and strategy." If this doesn't interest you, move along and find a discussion topic that is more to your liking. Alternatively, contact Baron about becoming a moderator, and maybe he'll give you the power to close threads that you aren't interested in.

"SEC regulations" on this topic? Perhaps you would care to share details of your knowledge on this topic, by posting SEC links and quotations that support your views. That could be helpful in this discussion.

Non-disclosure agreements? If you don't trust the firm that you are working for, then an NDA is not worth the paper it's written on. Ask the independent traders that had accounts with Team Trading or VCM how well their signed contracts have held up.

"OP doesn't have a whole lot of alternative prop firms that are willing to accept him?" I don't have a clue, but I don't see any evidence from his posts that would support this wild assumption.

"Stop beating up on this dude that has nothing to do with this 'firm' in question?" There is nothing to suggest whether his 'dude' has anything to do with the firm "in question" or not. Why do you assume he does or does not?

Sounds to me that you have little knowledge pertaining to the topic of this thread, and prefer to make baseless assumptions and unsupported conclusions. I would suggest you might be more productive asking questions (if you are interested in information), not readinging this thread (if you are uninterested in the topic) or contributing something of value to the topic if you have any to contribute. Other than clarifying that you don't know Don, the rest of your post merely seems to inform us that you don't like the topic and are not interested in further discussion. Fine. For the rest of us, it's a serious topic.

I'm done with this topic, and will go back into hiding now. Have the last word to your satisfaction, if you please, but don't be fooled into thinking that this is an insignificant or unimportant topic. For a clueless or unsuccessful trader, it is not applicable. But, for a successful systems trader, it is one of the most important things in his mind when choosing a broker. From your comments, I assume it does not apply to you.
 
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