QuantConnect is an

open-source Open source is source code that is made freely available for possible modification and redistribution. Products include permission to use and view the source code, design documents, or content of the product. The open source model is a decentrali ...

, cloud-based

algorithmic trading Algorithmic trading is a method of executing orders using automated pre-programmed trading instructions accounting for variables such as time, price, and volume. This type of trading attempts to leverage the speed and computational resources of ...

platform for

equities Stocks (also capital stock, or sometimes interchangeably, shares) consist of all the shares by which ownership of a corporation or company is divided. A single share of the stock means fractional ownership of the corporation in proportion t ...

, FX,

futures Futures may mean: Finance *Futures contract, a tradable financial derivatives contract *Futures exchange, a financial market where futures contracts are traded *''Modern Trader'', formerly Futures, an American finance magazine Music * ''Futures' ...

, options, derivatives and

cryptocurrencies A cryptocurrency (colloquially crypto) is a digital currency designed to work through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it. Individual coin ownership records ...

. QuantConnect serves over 100,000 quants from over 170 countries, with customers including

hedge funds A hedge fund is a pooled investment fund that holds liquid assets and that makes use of complex trading and risk management techniques to aim to improve investment performance and insulate returns from market risk. Among these portfolio techniq ...

and brokerages, as well as individuals such as

engineer Engineers, as practitioners of engineering, are professionals who Invention, invent, design, build, maintain and test machines, complex systems, structures, gadgets and materials. They aim to fulfill functional objectives and requirements while ...

mathematician A mathematician is someone who uses an extensive knowledge of mathematics in their work, typically to solve mathematical problems. Mathematicians are concerned with numbers, data, quantity, mathematical structure, structure, space, Mathematica ...

scientist A scientist is a person who Scientific method, researches to advance knowledge in an Branches of science, area of the natural sciences. In classical antiquity, there was no real ancient analog of a modern scientist. Instead, philosophers engag ...

s, quants, students, traders, and programmers.

History

Jared Broad founded QuantConnect in 2011. Broad started the company in his downtime while doing humanitarian work in

Chile Chile, officially the Republic of Chile, is a country in western South America. It is the southernmost country in the world and the closest to Antarctica, stretching along a narrow strip of land between the Andes, Andes Mountains and the Paci ...

. QuantConnect became incorporated in 2013, and became open-sourced in 2015. QuantConnect has seen substantial user growth in recent years, going from 45,000 users in December 2017, to 55,000 users in May 2018, then to over 65,000 users in October 2018. About half of the company's users are in the U.S. and the other half are international. QuantConnect added

cryptocurrency A cryptocurrency (colloquially crypto) is a digital currency designed to work through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it. Individual coin ownership record ...

support in October 2017, integrating with

Coinbase Coinbase Global, Inc. is an American cryptocurrency exchange. It was founded in 2012 by Brian Armstrong and Fred Ehrsam. Coinbase has over 100 million users, and is the largest U.S. based cryptocurrency exchange as well as the world's bigge ...

’s GDAX exchange.

Business model

QuantConnect provides

market data In finance, market data is price and other related data for a financial instrument reported by a trading venue such as a stock exchange. Market data allows traders and investors to know the latest price and see historical trends for instruments ...

and a cluster computer directly to engineers around the world, backtesting and building quantitative trading strategies across multiple markets, including equities, futures, options, cryptocurrencies, CFDs and FX. Once the team greenlights a user-generated algorithm, it is loaded into QuantConnect's Alpha Streams API and priced accordingly by the quant who developed it. According to Broad, about 5% of users consider their work with QuantConnect to be full-time. Rather, many algo traders use the platform's technology infrastructure to launch their own hedge fund startups. QuantConnect launched its Alpha Streams project in December 2017. This marketplace provides the community the freedom to license their alpha-generating insights to quantitative funds. Hedge funds that leverage the Alpha Streams API search for algorithms that fit their specific criteria and license them for a monthly fee. Quants earn 70% of these fees, which can run anywhere from $100 to $30,000.

Technology

QuantConnect supports coding in

Python Python may refer to: Snakes * Pythonidae, a family of nonvenomous snakes found in Africa, Asia, and Australia ** ''Python'' (genus), a genus of Pythonidae found in Africa and Asia * Python (mythology), a mythical serpent Computing * Python (prog ...

and C#, but also supports other languages through its open-source project, the Lean Algorithmic Trading Engine (LEAN). LEAN is an open-source algorithmic trading engine that allows users to do the same algorithm design, backtesting, and trading that they can do on the website. Once users code an algorithm, they can run a backtest on historical data, which provides a full breakdown on how it could have performed in the market in the past. LEAN is free to download and extend for commercial purposes. As of January 2021, there are over 100 LEAN-Powered Hedge Funds and 103,000 live algorithms successfully deployed on LEAN, with over $8.1 billion of asset volume traded through the engine.

Industry and competition

Founded in 2011, Quantopian was an early leader in the space and a key competitor of QuantConnect. Platforms like QuantConnect and CrunchDAO capitalized on Quantopian's shut-down in 2020, with an industry journalist commenting in November 2020, "QuantConnect has 115,000 users and some of its strategies are being licensed with funds that have $65bn in aggregate AUM". The quant community also relies on a number of

open source Open source is source code that is made freely available for possible modification and redistribution. Products include permission to use and view the source code, design documents, or content of the product. The open source model is a decentrali ...

projects.

References

{{reflist, refs= {{Cite web , title = Howls of pain as quant site 'unexpectedly' shuts down , author = Sarah Butcher , work = Efinancial Careers , date = 2020-11-02 , access-date = 2021-08-22 , url = https://www.efinancialcareers.com/news/2020/11/quantopian-shutdown Free and open-source software Electronic trading platforms 2011 software