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Allocations of Capital to Trading Algorithms
Capital allocation describes how CloudQuant, or another fund, divides their financial resources and other sources of capital to different trading strategies. Fund managers optimize capital allocation so that it generates as much return on capital as possible.
The heart of the CloudQuant business plan is our client algorithm license agreement. The algorithms created by our clients are their proprietary information. We clearly state this in our user agreement.
Once a researcher requests that we fund their strategy, we will review the simulation performance report. If the algo is selected for licensing, we provide the client with a proposal to enter into a mutually beneficial profit-sharing licensing agreement. When both parties agree to these terms we will fund (allocate) the strategy with our own capital.
To learn more about the requirements for a CloudQuant risk capital allocation see “The Trading Strategy Incubator.
See also: CloudQuant’s record of allocations.