FAQ - FTX Quant Trading Competition


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What are the relevant deadlines and other key dates?

 

Individual Signup: Saturday, September 24, 2022 at 23:59 EST

 

Team Submission: Wednesday, September 28, 2022 at 23:59 EST

 

Contest Official Start Date: (First day to print eligible trades): October 1, 2022 00:01 EST

 

Contest End Date: November 30, 2022 at 23:59 EST



How many teams are participating?

 

FTX has capped the number of teams at 100.  Following the individual signup deadline, each of these teams will be assigned to schools, more or less proportionally to their representation relative to total.  For example, if a school has 50 signups, out of 500 total signups across all schools.  That school should expect to receive ~10 teams.

 

A school is not obligated to use all of the teams allocated to them, and can instead form into some smaller number.  In the event that a school leaves teams unused, these teams will not be reallocated, and instead, FTX will just split the total funding pool across a smaller number of teams (i.e. more working capital per team to trade with).



How are teams formed?

 

FTX grants each qualified club (“Club”) at a school full discretion in how to divide themselves into teams.  You are only restricted by the number of teams made available to you. Teams can be as small or as large as you would like them to be.  Any unused teams will be “burned,” meaning they will not be re-allocated, but instead will reduce the total number of teams competing.

 

When you have formed your team, you should elect a designated team member to submit your team name, and a list of it’s members via the this form: https://airtable.com/shrC4t35taJrFfdR6

 

Each team will be allocated the same amount of working capital, which will be equal to [$300,000 / number of teams formed].  Given a maximum of 100 teams, each team is guaranteed no less than $3,000 to trade with.





How will each team be allocated their capital for trading?

 

Each team must meet a set of eligibility requirements prior to receipt of their funding allocation.  These are:

  1. First, and most importantly, each representative Club must open an account with FTX US, and pass the onboarding requirements (note: many Clubs have already completed this, so please check with Club leadership to confirm)
  2. You must fill out the team submission form (all individuals named must have a KYC’d account with FTX US, and have completed the signup form.)
  3. Once the account has been opened, please work with Club leadership to create a subaccount within the main Club account, and create your own permissioned login.  Instructions can be found here.You should name the account the same as your team name in (2).  The permissions for each login should be as follows:
    1. Restricted to your team’s subaccount
    2. Trading Permissions Only, no withdrawals
  4. Now that your setup is complete, you need to define your strategy, and submit for approval via the Strategy Submission Form.  The key information we will be asking for:
    1. A high-level overview of your strategy
    2. Any assets necessary for your inventory that you will need to effectuate your f strategy while eliminating price risk (details below).

 

Note: FTX must approve each step above prior to funding a team’s subaccount.  A team will become eligible to trade at the later of: October 1, 2022 at 00:01 EST and the point at which funds have been transferred into their subaccount.



What should be included in the strategy submission form? 

 

Before each team becomes eligible to trade, we require that they define the strategy that they intend to run.  While there is no specific guideline on the type of strategy you may or may not run, FTX must provide their approval before you will be allowed to trade.  This is mostly to demonstrate that you have put thought into your strategy, and to prevent gaming the system.

 

As a part of this strategy submission, you specify the amount of trading capital (based on the eligible inventory available to you) necessary to execute on the strategy  we may in our sole discretion allow you to utilize all or part of the applicable capital allocation reflected in your strategy submission for the length of the contest period.

 

For more information on how this will work, please reference section 4(e) Inventory and Price Risk on the Official Contest Rules.



What is the Scoring System?

 

Points are awarded according to the Points Grid Below.  At the end of the contest period, each team’s points earned will be multiplied by a Profitability Factor described below.  After applying the factor, teams will be ranked according to total points earned, with teams earning the most points being ranked the highest.

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What is the methodology behind the scoring system?

 

Faced with a number of constraints, we designed the scoring system in such a way that first and foremost allows for flexibility for participants with varying priorities and schedules outside the competition.  To that end, while there are 61 eligible trading days for the period, teams which excel can win with having traded only on 10 of those 61.

 

When determining which metrics to include in the scoring, we settled on the following mental framework:  The best indicator for a team having an edge is for them to be able to generate positive returns on high volumes.  

 

Finally, we layered on mechanisms for reducing the game-ability of the scoring system: the StrategyDefinition process (described above), and the Profitability Factor (described below).



What is the ROI Multiplier?

 

More than anything else, we want to reward profitable trading strategies.  Simply churning through volume, at the cost of depleting your capital base, will cost you.  Which is why we have chosen to introduce the ROI Multiplier.

 

The ROI Multiplier is a multiplier applied to the total points your team accumulates throughout the competition.  It is calculated as ((the Team’s final Subaccount balance in USD / the Team’s starting Subaccount balance in USD)^2)

 

The result is that points earned on successful strategies are rewarded, while points earned for ineffective strategies are discounted.





What are the prizes for achieving highest profitability?

 

We have a $30,000 prize pool which will be paid out to the top 5 teams according to most points scored. The amounts awarded will be:

 

1st Place:  $15,000

2nd Place: $7,500

3rd Place: $5,000

4th Place: $1,500

5th Place: $1,000

 

These will be paid out evenly across to the FTX US account of each individual winning team member.



Do we get to keep our Net Trading Profits? 

Yes. Club members retain their collective teams’ net trading profits.  That is, if a club has two teams, and one team loses $500, while the other team earns $1,000, the club members will retain $500 in Net Profits.

 

The club will have it’s choice for how to distribute these profits according to these three options:

  1. Equal split across all club participants
  2. Split proportionally according to the profits/losses generated by each team; or,
  3. Clubs can specify something different than above (which may be accepted or rejected at FTX’s sole discretion)

 

Are there any other prizes?

 

FTX US may choose to introduce additional non-cash prizes at our sole discretion. We will alert eligible participants that they can receive such additional prizes if they become available. Unless provided explicitly in the Contest Terms or in these FAQs, participants should not expect additional prizes.