Price of an algorithm for automated trading.

Discussion in 'Psychology' started by Unit001, Jun 9, 2009.

How much would you pay?

  1. 1 million

    8 vote(s)
  2. 10 million

    2 vote(s)
  3. 100 million

    4 vote(s)
  4. 1 billion

    13 vote(s)
  1. Unit001


    I wasn't sure if this belongs under psychology or Automated Trading section. How much would you pay for automated algorithm that guaranteed always to preform in all markets sectors and instruments. And allow 100% return a year.

    While sale of such an algorithm isn't possible for obvious reason.

    How much would you pay?
  2. xiaohu


    you miss out the 9.99 option :)
  3. Unit001


    You mean zero don't you. That's fair too, your opinion counts as well.
  4. CBuster


    guartaneed 100% pa? congrats - you've produced a candidate for stupid question on the year award.

    you might as well ask "how much would you pay for a machine that turns water into crude oil" or "how much would you pay for access to endless free cash".

    bottom line is you are asking for a price tag on unlimited free money....
  5. Unit001


    not true, market liquidity limits comes to mind
  6. CBuster


    lol - no it doesn't. all you say is 100% guaranteed. you mention no liquidity constraints. otherwise the price is totally dependant on the constraint, which you don't even mention.

    but let's assume i am somewhat restricted by liquidity. you still qualify that it works for 100% return guaranteed on every stock, sector and market. well, between the global stock, fx, bond and commodity markets, i'm sure i could find enough liquidity to invest, say, $100bn. within 6 months, i am the worlds richest man.

    like i said - stupid question.
  7. Corey


    Depends on scalability, access to capital, and life expectancy...

    Theoretically, the price should be infinite ... but this isn't an ideal world and all strategies have scalability decay. If you started this strategy with $100,000 and made 100% a year, you would have more money than the USA GDP in ~28 years...

    So, again, it depends on the scalability. Something that returns 100% but can't handle much more than $10,000 isn't worth nearly as much as one that can handle up to $5,000,000.
  8. sjfan


    You are injecting real world concerns into a question that pre-supposes the existence of the finance equivalence of a perpetual motion machine...

    To the OP... what is the motivation for this question?

  9. There is an old saying about how on Wall Street, when a man with wisdom meets a man with money, the wise man leaves with the money and the rich man leaves with wisdom.

    No one is going to sell you the keys to the kingdom period. Your hopes and dreams are being preyed upon.
  10. That's quite true! If its drawdown is relatively large (say -70% yearly), the value would be zero.
    #10     Jun 9, 2009