Would you lease an automated trading system

dom993 · Jan 2, 2013

I am evaluating a couple of options to monetize my trading system while I trade it live - one of these options being to offer the Ninja strategy for lease.

I have the following questions for you:

1. "Would you ever lease an automated trading system"?
2. "If yes, what would be the key aspects you would base your due-diligence & final decision on"?
3. "Would you rather lease a system running on NinjaTrader, or would a signal-service off Collective2 be a better alternative for you"?

Thanks in advance for your responses

sma202 · Jan 2, 2013

Quote from dom993:

I am evaluating a couple of options to monetize my trading system while I trade it live - one of these options being to offer the Ninja strategy for lease.

I have the following questions for you:

1. "Would you ever lease an automated trading system"?
2. "If yes, what would be the key aspects you would base your due-diligence & final decision on"?
3. "Would you rather lease a system running on NinjaTrader, or would a signal-service off Collective2 be a better alternative for you"?

Thanks in advance for your responses

if it doesn't make any money for you then of course lease it, otherwise why would you ever do it? given that you're using ninja I guess it's the former.

comintel · Jan 2, 2013

Quote from sma202:

if it doesn't make any money for you then of course lease it, otherwise why would you ever do it? given that you're using ninja I guess it's the former.

I agree - it would only be worth leasing out if it was marginally profitable at best, and you were trying to recover your development costs.

dom993 · Jan 2, 2013

Quote from sma202:

if it doesn't make any money for you then of course lease it, otherwise why would you ever do it? given that you're using ninja I guess it's the former.

I am trading it this year (2013) to the max of my trading account, after trading it on a couple contracts per setup since April 2012 ... but that will still be limited to 6 contracts per setup, at least for the next few months.

Ninja certainly has some limitations & issues, and I had to write a couple thousand lines of code just to work around their inability to work properly with InteractiveBrokers' native OCO. I also found & addressed a number of other things. But in the end, I have a very robust system.

themickey · Jan 2, 2013

How does Leasing a trading System work in terms of the owner gaining payment or a royalty without the System being duplicated and you becoming redundant?

Do you just give the whole algo to the client or how does this become practical?
Thx

dom993 · Jan 2, 2013

Quote from themickey:

How does Leasing a trading System work in terms of the owner gaining payment or a royalty without the System being duplicated and you becoming redundant?

Do you just give the whole algo to the client or how does this become practical?
Thx

I would lease an executable version of the strategy, allowed to run on specific instances of Ninja (using the Ninja MachineId for that), and programmed to expire at a set date (corresponding to the current term of the lease).

Monthly or quarterly payment of the lease through PayPal.

WinstonTJ · Jan 3, 2013

Try running the system live right now and fork the code so you can run several instances (which will compete against each other). See what happens.

What you describe is usually a bad idea depending on the time frame or holding period of the trades.

Pekelo · Jan 3, 2013

Quote from sma202:

otherwise why would you ever do it?

For more money? People are dense....

HurricaneUS · Jan 3, 2013

Quote from sma202:

... given that you're using ninja I guess it's the former.

I'm highly profitable and I use Ninja as my main trading platform so what's your point

gmst · Jan 3, 2013

Quote from dom993:

I am evaluating a couple of options to monetize my trading system while I trade it live - one of these options being to offer the Ninja strategy for lease.

I have the following questions for you:

1. "Would you ever lease an automated trading system"?
2. "If yes, what would be the key aspects you would base your due-diligence & final decision on"?
3. "Would you rather lease a system running on NinjaTrader, or would a signal-service off Collective2 be a better alternative for you"?

Thanks in advance for your responses

Q:What is the other option that you are evaluating other than leasing your strategy?

A1: Yes I would lease, but I would not lease my best systems
A2: This might seem like a strange way of looking at this - but I would only lease a system if it appears that I will be able to make 100$ per hour on it. So, if I need to spend 20 hrs a month on maintaining the system/subscription (answering emails etc), the system should make me 2000$ at the minimum from subscription (at least after 4-5 months).
A3: No idea - haven't done any real analysis on this