Two fintech startups, QuantConnect and Quantopian, have extended their trading solutions into the futures markets, providing users with easy-to-access tools to build their own automated futures trading strategies.
On April 27, QuantConnect announced that its open-source algorithmic trading platform now supports futures and options. Users can now backtest, research and live trade these products on the company's cloud-based platform. In addition, the addition of futures and options means that users can design trading strategies that use multiple asset classes. For example, users can combine their existing equities strategies with the new options support to hedge their positions and model the historical performance.
The QuantConnect platform supports C#, Python and F# programming, allowing users to build and share algorithms in several programming languages. QuantConnect customers can take advantage of Co-Pilot, an automated predictive coding tool that helps users write strategies by providing intelligent and relevant suggestions, saving time and reducing programming errors. QuantConnect also provides access to a library of historical data so that users can back-test their trading strategies. For example, the data for futures includes tick and quote data from January 2009 to the present for every contract traded on CME. The data is provided by AlgoSeek and is updated weekly.
“Historically, these types of tools have been limited to the world’s biggest hedge funds with the budget and engineering firepower to build and maintain such platforms,” said QuantConnect CEO Jared Broad. “But with QuantConnect’s powerful open-source initiative, nearly every quant and engineer can now design and instantly deploy strategies in a brokerage account.”
QuantConnect was founded in 2013 and currently has more than 30,000 users, including programmers at banks and hedge funds as well as individual traders. Trades are executed through several brokers that have partnered with QuantConnect, including Interactive Brokers, FXCM and OANDA. QuantConnect charges monthly subscriptions and makes money by introducing its customers to its brokerage partners.
Quantopian, an investment firm that has built a platform for crowd-sourced quantitative investing, is moving down the same path, adding futures data to its platform and providing its users with the ability to research trading strategies and build algorithms to trade those strategies. The company initially focused on U.S. equity markets, but last fall it began exploring the idea of adding futures in response to requests from its users.
At the end of April the company launched futures in its backtesting platform, covering 72 contracts listed on CME, CBOT, Nymex, Comex, ICE Futures US, and the CBOE Futures Exchange. The company has not yet rolled out live trading for any futures algorithms developed on its platform, but expects to do at a later stage. Quantopian also is developing educational resources, including tutorials and lectures, to help its users understand the intricacies of trading futures, such as term structures and rolls.
Quantopian was founded in 2013 and provides data, a research environment and a development platform for quantitative traders. Quantopian also provides capital to back any algorithms that fit its investment strategy. Users are not charged for developing their algorithmic trading strategies. Instead, Quantopian offers to license algorithms that look promising and provide them with funding, with the algorithm developer getting a share of the profits. Quantopian says it has more than 100,000 users, including finance professionals, scientists, developers and students from more than 180 countries.
