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Live trading failsafes
Matt Clark
posted Dec 10, 2014

Question for the community and the Quantopian devs:

I am a little concerned about live trading algorithms stopping out for an error on a day in which I need them to trade in order to avoid a significant loss. Example, volatility-based trading on VXMT prices (which have to be imported as a CSV from the CBOE) and let's say the CBOE messes up their CSV or they change the URL or something else happens which is out of my control that breaks my algo. And let's say this happens while I don't have immediate access to an internet connection to liquidate my positions (I know that's a lot of "ands" which lowers the risk, but take the journey with me for a minute or two).

My questions:

1) What are other community members doing to hedge against this risk?
2) Quantopian devs, any plans to enable filed contingency plans in case of algorithm error? Like "in case of error, sell everything" or "in case of error, implement this hedging trade", or so on?

2 responses
Simon Thornington
Dec 10, 2014

Several people I know do this using SMS text messages, not sure if you can send those from within a Quantopian algorithm ?

Alisa Deychman
Dec 12, 2014

To answer question #2, we have trading guards that you can implement in your algorithm to protect against runaway scenarios.

As we grow, we'd like to be able to send text messages from your live trading algorithm. We're not at this stage yet, but I'd like to see SMS texts and end-of-day email summaries of the algorithm activity!

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The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by Quantopian.

In addition, the material offers no opinion with respect to the suitability of any security or specific investment. No information contained herein should be regarded as a suggestion to engage in or refrain from any investment-related course of action as none of Quantopian nor any of its affiliates is undertaking to provide investment advice, act as an adviser to any plan or entity subject to the Employee Retirement Income Security Act of 1974, as amended, individual retirement account or individual retirement annuity, or give advice in a fiduciary capacity with respect to the materials presented herein. If you are an individual retirement or other investor, contact your financial advisor or other fiduciary unrelated to Quantopian about whether any given investment idea, strategy, product or service described herein may be appropriate for your circumstances. All investments involve risk, including loss of principal. Quantopian makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances.