Unless you’re a Wall Street expert, it’s not easy to figure out the best stock option investment strategies.
That’s where Quantcha wants to help. Earlier this month, the Redmond-based startup launched its Options Search Engine (OSE), a platform of tools for investors.
The OSE lets users input their stock of choice, time horizon, budget and desired balance of risk and reward. It then generates an analysis of attractive trade opportunities.
Quantcha was founded by SharpLogic CEO Ed Kaim, who built the tool after struggling to find something similar when he wanted help analyzing trades.
“I started trading options a few years ago, and had gradually evolved into using more sophisticated strategies,” he said. “Unfortunately, there’s a lot of work involved to analyze each trade, and there were no tools that would help me understand the best way to play a market forecast for a stock.”
Quantcha’s web-based OSE is free and user registration isn’t required to use the tools, although registered users enjoy added benefits like trade watch-lists.
We caught up with Kaim for this installment of Startup Spotlight, a regular GeekWire feature.
Explain what you do so our parents can understand it: “We help you turn an idea about a stock into the perfect trade.”
Inspiration hit us when: “The most inspired I felt was when I discovered how far behind investing software is compared to the apps and services we use for other things. They’re not user-friendly. Some require Windows desktop installs. Others only work in specific browsers. They’re rarely mobile or touch-friendly. Nobody has touched social or syndication. It’s like someone shipped a great product in 1998, which was immediately declared the pinnacle of trading software. Since then, everyone else has just been trying to clone it.”
VC, Angel or Bootstrap: “We’re bootstrapped. It doesn’t take much to build a software startup these days, and we have enough experience building and launching these sorts of businesses that it’s become a well-worn path for us. I like to pick scenarios that don’t cost much to get off the ground, and this business also happens to have fairly low ongoing overhead. If we didn’t already have the resources, I could see getting an angel involved. I’ve had some great discussions and experiences with Seattle-area angels in the past, and there are a lot of people I like working with out here.”
Our ‘secret sauce’ is: “Every other company I’ve talked to is taking on a technology venture from a finance background. We’re the exact opposite because we’re a tech company first. That might seem like a disadvantage, but it’s actually given us a really unique perspective. We’re taking our expertise, which is building great modern software that’s broadly accessible, and applying it to a space that has been lagging for the last fifteen years. We don’t have experience from other apps to draw from. We’re building everything the way we would want it to work from the beginning, and I think that will resonate with option traders of all levels of experience.”
The smartest move we’ve made so far: “I thought about taking on an industry insider early on in the process to make sure our software stayed within the realm of what people expected. In hindsight, that would have been a huge mistake since our lack of influence from the industry has led to the elegant user experience investors of all levels of experience actually want, and not the monoliths they’ve seen over and over.”
The biggest mistake we’ve made so far: “It’s still early, so I’d like to think our biggest mistake is yet to come.”
Would you rather have Gates, Jobs, Zuckerberg or Bezos in your corner: “Who’s owed the most favors by the people running online brokerages? The first one to bring me a deal is in.”
Our world domination strategy starts when: “Options trading can be very risky, and that keeps the masses of retail (non-professional) investors away. However, it doesn’t need to be that scary, and our goal is to make it easier for anyone to leverage the opportunity options provide to round out their investments. Our software walks the fine line of simplifying the process of finding trades with the critical need to inform the investors of the very real risks each trade poses. If we can turn the corner, it will result in the number of options investors growing multiple times over.”
Rivals should fear us because: “Rivals should fear us because we’re incredibly disruptive. We’re approaching this space in a way that hasn’t even been considered before, and I don’t think they’re conditioned to expect it. I’ve had plenty of early discussions and demos with senior people in the industry, and many of them have had a hard time understanding why we’ve invested what we have in our social and syndication strategies. The industry seems to be having trouble figuring out what to do with the modern Web, and that gives us a huge advantage. The fact that we’re completely free also enables us to do things that wouldn’t work coming from paid apps or brokerage systems.”
We are truly unique because: “We’re incredibly disruptive in our space. We’re delivering key features that nobody else offers, bringing our service to all sorts of devices, and making options trading accessible to a new segment of investors. We’re also enabling collaboration on forecasts and trade ideas via social media and third-party syndication. And we’re doing it all for free, without ads, and without even requiring registration.”
The biggest hurdle we’ve overcome is: “We’re in the process of getting online brokerages to grant us access to their trading systems so that their customers can begin the order workflow from our site. A few years ago they all had APIs that you could easily sign up for, but they’re all shut down now. At first it was really difficult to even get conversations started, but once we launched and they were able to see our software for themselves, the channels have really opened.”
What’s the one piece of advice you’d give to other entrepreneurs just starting out: “You need to execute, and sometimes it’s really hard. Procrastination is so easy when you’re not reporting to someone. I wish I had some tip or trick about how to get over this, but I don’t. I guess my advice is for you to stop reading this and get back to work.”