Selling systems I developed to hedge fund

Quote from Runningbear:

Another option is to supply your systems coded with the code encypted and time limited. The code simply stops working after a given period and if they wish to continue using it, they have to pay you for a working version of the system.

This is pretty easy to do. And I know you can do it in esignal and tradestation.

Runningbear
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I agree with Runningbear..

Have it coded to time out at a specified time. This will the system buyer and opportunity to test for themselves.

As an alternative, you can also contact different brokers who will trade it for customers. Of course, they will be some marketing involved, but it is an option.

I know a couple of developers who have done this. You can PM me if you need more information.
 
Why don't you take a few pages from Microsoft's play book...they have some of the best NDAs I have ever seen. Plus you might supply the Tradestation or eSignal code on a disk that requires an activation key distributed by a computer upon acceptance of NDA to function in any mode...similar to Microsoft latest copy protection schemes.
 
Another option is too use some sort of net meeting software that will you to share your desktop with systems running so a "buyer" can log into it and watch in real-time.

The only thing is that I am not sure a hedge fund will be interested in this...
 
Quote from mchugh:

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So my question is does anyone know of a way I can sell my systems to hedge fund managers without giving my systems away prior to the transaction? Does anyone have any experience in such transactions. With backtesting becoming so mainstream, it sounds like a good opportunity for a lawyer to become some sort of "agent" or middleman between system developers and hedge fund managers.

Any info would be appreciated.
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Very simple to do. Have a programmer write a simple TCP/IP program that connects to the potential clients (hedge funds etc) server set up to get real time trades from your program. On the hedge funds end, there is a simple program running on this computer listening for trades on a TCP/IP port.

When a trade is made by your system, the machine will send the time, the instrument, the bid x ask of the instrument you are trading, and the fill price, to the remote machine through TCP/IP to the given address/port. This will take about 250 milliseconds if you each have T1 internet access, even across country.

In effect you are sending them realtime signals generated automatically by your trading system, which they can easily verify on their end for accuracy and profitability.

This program would take a decent programmer no more than 1 day to code.

nitro
 
Quote from Runningbear:

Another option is to supply your systems coded with the code encypted and time limited. The code simply stops working after a given period and if they wish to continue using it, they have to pay you for a working version of the system.

This is pretty easy to do. And I know you can do it in esignal and tradestation.
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That's not secure. Machine code can be trapped, debugged, disassembled and converted back to the original formulas. Regardless of whatever roadblocks or encryption you put in, the code must eventually execute on the CPU. There are of course very sophisticated methods to block debug trapping, but these come at the expense of cost or difficulty.

I agree with Nitro. The most logical and sensible solution is to keep the trading software on firewalled servers and broadcast trade signals in real time over a TCP socket. Be sure to review and compile the code yourself. Don't accept someone else's EXEs because it is trivally easy for the programmer to include a trojan horse or backdoor into your server.
 
Nitro's idea is good. If you release the system to install on other machines it WILL be reverse engineered, I guarantee it.

Remember, an nda is only as good as the parties.

You may want to you change your target market away from hf's and towards consumers. You can use www.collective2.com and other brokers like striker who will do all your marketing for you and you don't ever release your code, time stamped or otherwise.
 
Quote from prophet:

That's not secure. Machine code can be trapped, debugged, disassembled and converted back to the original formulas. Regardless of whatever roadblocks or encryption you put in, the code must eventually execute on the CPU. There are of course very sophisticated methods to block debug trapping, but these come at the expense of cost or difficulty.

I agree with Nitro. The most logical and sensible solution is to keep the trading software on firewalled servers and broadcast trade signals in real time over a TCP socket. Be sure to review and compile the code yourself. Don't accept someone else's EXEs because it is trivally easy for the programmer to include a trojan horse or backdoor into your server.
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i realise that the encryption can be cracked, however you're then taking about a large financial institution knowingly committing what is now a pretty serious crime.

And cracking the software is a lot of effort to go to when you've already come to a mutually beneficial arrangement regarding the sale or profit share on the system. It's certainly a lot cheaper than running servers 24/7 on T1 lines.

NDA's might not be worth the paper they are written on, but with a number of protection divices in place, you can create a reasonable level of protection. Of course dealing with reputable individuals and firms is probably also a great starting point.

Runningbear
 
Quote from Quah:

Why would a hedge fund want to buy your systems instead of just trading their own?
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Why not find a managing partner and open your own hedge fund? Have him run the daily management and trading of the systems while you do your systems dev. Setup a seperate entity that licenses the signals to your hedge fund if you don't want anyone else to know how the signals are generated.
 
Quote from Quah:

Why would a hedge fund want to buy your systems instead of just trading their own?
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There is about 85% chance that after couple of years a hedge fund will blow up . perhaps the main reason for this is continuance of good systems.
 
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