My Thoughts on Quantopian’s Closing

Posted on Oct 30, 2020 by Kris Longmore
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I was very sad to learn that Quantopian is shutting down its community services.

Quantopian’s efforts to bring quant finance outside of institutions was a genuine game-changer. The educational content was solid, the tech was excellent, and the QuantCon conferences were professional, well-run, and inclusive in a way that you never see at the “finance insider” equivalents. Any of us who are passionate about markets must feel a sense of gratitude.

Quantopian’s closure speaks to a fundamental reality: unique alpha is hard, particularly for the individual.

Professional teams have major advantages over independent traders:

  • A team to collaborate and share ideas with. No reinventing the wheel.
  • Good training
  • Technology that facilitates research and development

Quantopian’s vision was to eliminate these advantages. It faced significant challenges:

  • The constraints on the alphas that it could allocate to. Alphas needed to be unique, relatively slow-moving, and trade liquid instruments. That’s a difficult game, played by some of the biggest and most well-resourced players in town.
  • The inherent competitiveness among users in gaining an allocation meant there was always a good reason not to share your best work. That makes it hard to realise a community that is focused on collaboration for common benefit.

Quantopian is pivoting from crowd-sourced alpha to selling an enterprise-scale quantitative research platform. Which makes all the sense in the world when you’ve developed such brilliant technology.

But what about the Quantopian community? And individuals dedicated to making a fist of quant trading?

If you’re an independent trader, then the first challenge to Quantopian’s original vision need not apply to you. When you are your own risk manager, you can go hunting for alpha wherever you like. I suspect that many Quantopian users will use the skills they learned on the platform to pivot accordingly.

The QuantConnect platform would enable them to get up and running quickly – QuantConnect is developing a migration tool for Zipline algorithms, as well as referencing Quantopian’s open-source projects such as alphalens and pyfolio.

The second challenge is much more difficult to resolve. How do you align the interests of a community of traders such that individuals are motivated to share and contribute?

You need a vibrant and close-knit community, but you also need to make it worth people’s while. They need to get out more than they put in.

Our Robot Wealth Pro community has a collaboration portal that we call “The Lab.” The Lab is organised around Research Pods, which contain data, ideas, research, and peer-reviewed alphas. We provide a database of market edges, a knowledge base of quality training material, and guidance, feedback, and clear direction on research efforts.

The Lab serves three purposes for our community:

  • It gets people hands-on with research – as well as contributing, you’ll learn a ton from the feedback, guidance, and collaboration of your peers
  • It scales the research effort by enabling community contribution
  • It makes the fruits of that research effort available to the entire community

Which means that over time, two things grow faster than they otherwise would:

  1. Your research and trading skills
  2. The number of alphas available to you to trade

And because we’re all independent traders rather than institutions, there’s almost no risk of us competing away any alphas unearthed by the community.

We invite all fellow market-obsessed alpha-hunters to join us in the RW Pro community after completing one of our Bootcamps where you’ll:

  • Be initiated into the RW trading approach
  • Learn quant research skills
  • Add three systematic strategies to your portfolio

Join the waitlist for our next Bootcamp below, or click here to find out more.

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