Ok, Here are the problems that I see: You want a free call on software. Why do you have to own it if you did not pay for it? What I suggest is that if the PnL to the programmer through profit sharing goes above a certain amount agreed by the two parties, then you own the software. That way he did not work for nothing if the system fails. If the system generates no profit, you don't own it. We both win, or we both lose. It does put the programmer in a tenable position once he loses control of the software, since what is stopping you from breaking the agreement once you own the software? Assuming one can get past the trust issue though, this seems possible. Another strange thing that I see. If you have a HFS, how did that get written? Why is it that you only need the connection to the execution platform? I have never seen this type of deal. Depending on the complexity of what you want, I would be better able to tell you what is fair. I would say anything more than 15% is too much, unless you are trading a small account.
I may be interested. I have a development team that can code you anything you wish. Drop me a PM with a synopsis of your strategy.
Oh, yeah, I may be interested as well. Drop me a synopsis of your strategy and I will get back to you.
only way i'd ever pay a programmer % of profits is if i was making him a partner... in effect becoming my slave. unless i have no idea what i'm doing, it makes zero sense otherwise. i'd think twice about hiring from a trader msg board as well...
It can make lots of sense to make a programmer/Quant a partner. But usually that is done from the beginning between people that have a vision and different skill sets. This proposal from a one man show from people that can't pay for programing - this thread is almost certainly a joke.
Bingo. Any have decent software jock is going to ask the same thing. What you are proposing puts all the risk on him - personally I would not take a deal where the other side of the table has no skin in the game. Cheers.
What planet are you living on? The programmer is putting up many man-hours on something that very well may never work, and he may never see a cent, - and you say he's not taking any risk? If you're looking for a programmer who's not taking any risks, pay them by the hour like normal people.
I have two questions related to OP's query. Let's assume it's a great strategy. Let's also assume you don't want to keep the programmer on full-time but just on a one off basis to work on one strategy. 1) what is the going rate for a good programmer/quant to do this sort of thing? if paid by the hour - how much? If paid by assignment - how much? 2) much more important. how can you be certain that once you divulge your strategy and the programmer creates a system to essentially blackbox it, that he won't try to replicate it elsewhere? is there anyway of avoiding this other than keeping him at the firm? non-compete? do those really work? Anybody else have good ideas of not giving away the secret sauce while allowing him to fully automate it.
That happens all the time. First rate contract programmers are a minimum of $100/Hr. If all you need is something simple done, you may be able to find someone for much lesss. Some people go to Russia or India because that is much cheaper and try to get programming help this way. In almost every situation I have seen, that turns into a small disaster. It is impossible to keep your strategy safe if you divulge it. I have found that this paranoia is generally unwaranted and sometimes very warranted. If your strategy has a statistical edge and requires many trades to show a profit, I wouldn't worry one bit. If you have something that is closer to an arb, but requires a programmer to colocate a server on L-NET, and to have a $500,000 in an account and requires member rates, I would say worry a little but I wouldn't bother worrying about it that much. If by some miracle, you have some strategy that can be duplicated at Interactive Brokers and requires a $6k account and the system is pretty reliably making money and is relatively unsophisticated, I would worry ALOT. "If he had any balls he would be trading his own account" - A trader partner of mine making a statement to me about an ORC programmer that has a huge ego. Programmers don't have the balls to trade. That is what keeps most systems safe.