Frequently Asked Questions (FAQ) by System Developers

"Do I need to register with the CFTC or the SEC in order to sell my trading advice? Do I need some kind of license to start a trading system?"

If you are an American citizen, the short answer is: No, you do not need to register with any government agency, or pass any kind of test, or have a license in order to publish trading advice.

However, you must be aware of certain restrictions. The most important restriction is this. You cannot provide individualized advice to clients. That is, you cannot offer different advice to different clients based on their individual  financial situations.

Here's an example.

Allowed: "Attention all subscribers to my trading system: Buy IBM because I believe it is going up!"

Not allowed: "Dear John Doe: based on our conversation earlier today, in which you told me you were nearing retirement, I think you should buy IBM, because it will appreciate in value!"

The other important restriction is that you cannot manage clients' trading accounts on their behalf. You can't have access to their money, or issue trading instructions to their brokers. Otherwise you cross the line from publishing, which is allowed, to asset-management, which requires registration.

You must simply restrict your activity to publishing non-personalized advice which your clients can choose to act upon or not. (Note that using Collective2 to disseminate your trading advice via a Web site and email is considered publishing.) Remember that our right to publish and say what we like is protected by the First Amendment, a right that our citizens fight for, to this day. No small matter, that.

If you are not an American citizen, then I have no idea what kind of constraints your government places upon you. Please check with a local attorney.

"What brokers are supported by your AutoTrade technology?"

We support a growing list of brokers, and many new ones will be added soon. Remember that the broker you choose will depend on what kind of system you want to trade. To trade a forex system, you'll need a broker that allows forex trading, for example.

"I am a system developer. I want to trade the futures contract XXX. Can I do it?"

Probably. Collective2 already has a fairly substantial database of futures contracts that you can trade. If you try to trade a contract not currently in our database, you will be alerted of this fact, and I will automatically be alerted as well. I will then add the contract to the database, making it instantly tradable in the future. In general, we can add any contract available on the CME, CBOT, NYMEX, NYBOT exchanges.

"Can I trade options on futures?"

Collective2 supports trading of options on equities and ETFs, but not options on futures. If your trading strategy involves trading of options on a major index, such as the S&P500, or the Dow Jones Industrials, consider using options on the relevant ETF instead. For example, if your system needs to trade options on the S&P500, why not use options on the SPY (the "Spider," an ETF traded on AMEX). Dow Jones Industrial Average? Use DIA (the "Diamond" ETF).

"How do you calculate the amount of capital required to open and hold a position?"

For stocks, we assume traders will use maximum available margin, 50%, and that no stocks have special broker-specific margin requirements above and beyond Fed minimums. This is, of course, not necessarily the case in real life. (Also, for stock shorts, we assume all stocks are shortable, which is also not necessarily realistic, depending on your broker.)

For stock options, we assume you will receive the most favorable minimum margin requirements allowed under Fed regulations. (Long option purchases require 100% of the purchase price in cash.)

The software recognizes spreads and straddles and condors, and will take into account the lower margin requirements available for certain less risky positions.

For futures, we use SPAN margins. Collective2 automatically goes out and downloads the latest SPAN data files a minimum of once each day, so you can be assured that we calculate accurate future margin requirements. When normalizing P/L results against margin requirements, we use initial net margins which are always higher than maintenance margins. (Of course, if the maintenance margins increase above the initial margins, the system will recognize this.)

"Do you use real-time quotes? Why can't I see real-time prices when I enter a trading signal for my system?"

Yes, Collective2 uses real-time quotes to calculate trading system results, but we are not allowed to redistribute the quotes. That is why we do not display them.

"Can I link to my trading system on my own Web site, or in an email?"

Yes, we encourage you to do that. Collective2 has a feature which allows you to create a special URL or link that will take people directly to your trading system, without needing to log in and without stopping to look at other trading systems. To use this, click on the "Create Shortcut" feature next to your trading system.

"Can I write a computer program to enter my trading signals, instead of logging in and entering them manually?"

Yes. Collective2 offers an automation interface so that programmers can write software which enters trade signals automatically. The technical documentation is available here.

"Can I send my signals to C2 by email?"

We encourage you to use the C2 Web site to enter your trading signals here on C2. Alternately, we recommend you use our Signal Entry API. But if you really, truly, absolutely prefer to email your signals to us, you can use our newly-released (still in beta) Email Signal Entry. Here's how it works.

"Can I use TradeStation to generate my system's trades automatically?"

Yes. We have a TradeStation Interface, which allows your TradeStation software to automatically post its trades on Collective2, without human involvement. Nifty! The technical documentation is available here.

"Can I use NinjaTrader to generate my system's trades automatically?"

Yes. Please see this page.

"Can I use MetaTrader to generate my system's trades automatically?"

Yes. Please see this page.

"I currently use Interactive Brokers as my broker and type my trades into that company's TWS application. Is there any way I can automatically have my trades copied from TWS into my C2 system?"

Funny you should ask such as specific question for which we have a positive answer. Yes! Please see this page.

"Can I create a 'test' system in order to experiment with Collective2?"

Yes, you can create a "test system" that is not publicly visible and does not affect your track record in any way.

There are some very important restrictions you should be aware of. The most important is that you must declare your system as a test system before your enter any trade signals. Once you enter a trade signal, the system cannot be declared as a test system... ever. Otherwise, this would destroy the integrity of the C2 site, as it would allow vendors to hide their unsuccessful systems from the public. To designate a system as a test system, click the EDIT link near your system on the C2 home page. You must pay the C2 listing fee before designating a system as a test system.

About test systems: A test system does not appear to the public. No one can view its trades, and no one except you can subscribe to it or AutoTrade it.  One nice aspect of a test system is that you will be allowed to completely erase your test system as often as you like, restoring it to an initial blank state.

You can convert a test system into a live system, but you must entirely erase your track record before you do. Otherwise, the integrity of the C2 site would be compromised, for a similar reason as described above: vendors would convert only successful systems into live ones, leaving the unsuccessful ones invisible.

"My system has too much capital. I want to scale it down so that it trades smaller quantities."

You can "rescale" your system, even after starting it, but only in the downward direction. (For example, if you start your C2 system with $100,000 in hypothetical cash, but decide you'd rather trade a system with $10,000 cash, you can rescale. You can't give yourself more cash, however.)

To rescale, go to your system page, pull down the Admin menu, and choose "Rescale System," as in the picture below.

To attract the greatest number of subscribers possible (and to make AutoTrading simple and easier to control for these subscribers) your system should have the smallest amount of capital as is feasible for your trading method (leave room for the inevitable drawdown, of course). When you have a lot of "extra," unused capital in your system, you make it more difficult to AutoTrade your system and scare away subscribers.

"How can I attract more subscribers to my trading system?"

Collective2 spends hundreds of thousands of dollars to attract traders to this site. This large marketing effort helps you garner subscribers.

But if you are serious about earning subscription fees from your trading system, you should treat your trading system like a business. That means you should consider spending money on advertising. To help you do this, C2 offers several marketing opportunities. All of these opportunities are completely optional, and your choosing to use them or not will have no effect on your system ranking.

C2 Marketing opportunities:

Advertise your system on the C2 home page. Your system can appear at the top of the main C2 page. You can start running an ad instantly -- right now -- for as little as $20.

Feature your trading system. Appear in the "Featured System" box. Only systems which meet certain performance criteria are invited to appear here.

Sponsor the Instant Trade Messenger window. The ITM window is kept open during trading hours by the exact kind of customers you want to reach: people likely to subscribe to trading systems!

Of course, it's not necessary to spend marketing dollars here on C2. Go advertise your system on Google. Advertise on other trading sites. Be an active poster (but not a spammer) on non-C2 forums and message boards. C2 allows you to create a "shortcut" link that you can include in your posts and emails and advertisements. When someone clicks this link, they can be taken directly to your trading system on C2.

Finally, keep in mind the most important thing you can do to increase your subscribers: Build a track record. Very few people will subscribe to a trading system that is brand new, has zero track record, and doesn't show profitable results. We therefore encourage you to consistently enter your trade signals here on Collective2, and have them verified and monitored by the site.

"I am a trading system developer and several people have subscribed to my system on Collective2. How and when do I get paid?"

On the 20th of every month, our computer software calculates the "remittance" that is due to each system developer. This is the amount we have charged your customers on your behalf, less C2's fees and any refunds we have issued.

In order to decrease our financial risk of credit card refunds and "chargebacks," we will remit transactions only when they are 45 days or older. This means that your very first remittance might take as long as 75 days to arrive (if the stars are aligned in an unlucky fashion for you!). However, once you receive your first remittance, you will receive your next remittance 30 days later, and remittances will continue on this monthly cycle - every thirty days, on the 20th of the month.

Payments are transmitted through PayPal to the email address associated with your C2 account. You do not need to set up a PayPal account before your first remittance payment. PayPal will inform you that you have a payment waiting, and will allow you to set up your account and collect your funds then.

If you live in a country where PayPal refuses to send you payments, we can work out an alternative arrangement in which checks can be mailed to you, for an additional service fee. The checks will be drawn on a U.S. bank and payable in U.S. dollars.

"Please explain limit orders and stop orders."

Here is an explanation of limit orders and stop orders.

"How will I know when people "subscribe" to my trading system?"

Whenever people subscribe to your trading system, you will receive an email alerting you. (Similarly, you will receive an email when someone unsubscribes.) But you can check your subscription status 24 hours per day by viewing a Subscriber Report. To see the report, go to to your system's "Details" page and pull down the Admin menu. Then select Subscriber Management. You'll see a screen like this(made smaller to fit here, with personal info blurred to protect privacy):

In addition to tracking who your subscribers are, and when they are due to be billed, you'll also be able to do things like offering special subscription prices to certain subscribers, or creating electronic coupons that you can offer to people who are not yet currently a subscriber, but to whom you want to offer a discounted price in order to incent them to subscribe.

"How do futures and options expiration work on Collective2?"

Futures: If you trade futures, it is your responsibility to be aware of when futures contracts stop trading, and -- if you want to keep a position open -- you need to roll into the next contract. Collective2 emulates the behavior of several discount brokers: we will not call you on the telephone to warn you that a futures contract in your account is about to be "delivered." Instead, we will unceremoniously close out your position, at the market, approximately 48 hrs before the last trading day of the contract. Thus, we strongly encourage you to gracefully exit any positions in expiring contracts at least a week before the last trading day.

Options: If you own a long option position, and the option expires in-the-money, Collective2 will automatically exercise your position on the Saturday morning after expiration. This means you will buy or sell the underlying stock. Thus it's important that you have the margin available in your account; otherwise, you'll be greeted on Monday morning with a simulated margin call.

Similarly, if you are short an option, and the option expires in-the-money, Collective2 will automatically exercise your option. This too will mean that you will buy or sell the underlying at the strike price.

If you don't want to be exercised/assigned, then be sure to close out your option position before the end of trading on expiration day.

"Does Collective2 realistically handle dividends?"

Yes, we will automatically credit your C2 simulated account with cash dividends when you own a long stock position before ex-dividend date. Similarly, we will debit your account if you have shorted a stock.

"Can I trade mutual funds on Collective2? What about Rydex funds?"

Yes. Collective2 is intelligent enough to handle mutual funds and Rydex funds. We use PM pricing. To trade a fund, select that you want to trade a stock in the trade-entry screen. Then type the mutual fund symbol.

"Does Collective2 support Market on Open (MOO) or Market on Close (MOC) orders?"

Yes. Here are instructions.

"Can I create "conditional" orders?

Yes. Here is video showing you how.

"There was a problem with a trade on Collective2. Collective2 made a mistake. What should I do?"

Because often C2 uses a market simulation to determine trade prices, it's possible we'll make an error. If you feel we've made a mistake in one of your trades, please fill out a trouble ticket and a member of our Customer Service Team will try to fix the problem quickly. You'll see a little "ticket" icon next to each trade or signal in your system. Click the ticket beside the trade that has the problem:

How do I create a system on Collective2?

It's free to create a system on Collective2. Ready? Create system.