According to Forbes’ Tomio Geron, High frequency trading has been scrutinized in recent years because of its links to financial scares like the Flash Crash. But the actual algorithms used to power much of high frequency trading are not well understood, and locked up in hedge funds and large financial firms.
Startup Quantopian, which is coming out of beta today, aims to make these algorithms available to a much larger audience. The company, which has raised an unspecified seed financing from Spark Capital and market maker GETCO, provides browser-based tools for anyone with basic programming knowledge to create algorithms and simulate actual trading with them. John “Fawce” Fawcett started the company in 2011 and brought in cofounder and CTO Jean Bredeche, who he previously worked with at Tamale Software and Advent Software.
Quantopian provides market and company data for people to create their algorithms. They write the code on Quantopian’s site, then can run the algorithm on the site’s back-testing simulation to see how they would’ve performed historically. All algorithms are private by default. Quantopian does not have connections to live trading yet, but eventually plans to add that so traders can use their algorithms to trade through third party brokers. Quantopian has made its back tester tool open source to enable others to assist in developing the tool.