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Trading is Intellectual Property: the proof is Coke!

10 February 2014

Ever wondered what the common ingredient to trades, trading algorithms and Coke is?

Easy! Intellectual Property!

Agree that speculation is an IP industry? To understand the full implications for your trading income, look no further than Coca Cola: a lesson on capturing – or missing out on – the dividends accruing to intellectual property.

The origins of Coca-Cola (hat tip wikipedia)

Colonel John Pemberton was wounded in the American Civil War, became addicted to morphine, and began a quest to find a substitute to the dangerous opiate. The prototype Coca-Cola recipe was formulated at Pemberton’s Eagle Drug and Chemical House in Columbus, Georgia, originally labelled coca wine.

Insight 1: True intellectual property, like a successful trading strategy, is the valuable product of hard, sustained effort.

He may have been inspired by the formidable success of Vin Mariani, a European coca wine. In 1885, Pemberton registered his French Wine Coca nerve tonic (…) essentially a non-alcoholic version of French Wine Coca.

Insight 2: Your strategy’s IP could inspire others roaming the markets!

The first sales were at Jacob’s Pharmacy in Atlanta, Georgia, on May 8, 1886. It was initially sold as a patent medicine for five cents a glass at soda fountains.

Insight 3: IP has a value – no-one who has worked hard to develop a successful trading strategy gives it away for free!

With that in mind, look closer at the Coke ticket (a beauty, BTW)

First Coca Cola Ticket

Notice the Trademark Logo – IP Protection. This way you had no way to use the logo (IP!) without 1) advertising Coke and 2) incurring in legal risk.

Insight 4: Successful creators protect the IP they disclose!

Insight 5: Successful market the product of IP but do NOT, repeat DO NOT, disclose their IP!

The business model of IP is to disclose, for a price,  the product of the IP, not the IP itself! Coke buyers paid for a glass of patent medicine: they enjoyed the product of the IP (they drank it!), but NEVER, EVER got anywhere close to the formula (patent!). Pemberton (literally!) locked the formula in a vault to make sure that there was one and only one way to drink Coca Cola: to pay Pemberton for it, every time. 

Wonder what happens if you don’t do that? Look no further than… Coke!

Pemberton was diligent in withholding IP from customers… alas not from partners. By 1888, three versions of Coca-Cola were sold by three separate ¨partners¨ who laid hands on the formula.

Insight 5: IP, just like your trading strategy, benefits ANYONE deploying it. When disclosing your IP, you’re waiving (some or all of) the future profits it generates!

Result? The Pemberton family, like the inventor of Vin Mariani before them, lost Coca Cola to those who got access to the formula, and made the most of it.

Insight 6: IP benefits copiers as much (if not more) than inventors: IP leakage hurt Pemberton, but it hurt the inventor of Vin Mariani so much, that we even ignore his name!

Trading lessons?

If you didn’t already, now you know. Your trades ARE the product of your intellectual property.

If you absolutely must, tweet your trades, sell your algorithm or explain your strategy and charting set-ups in your blog. But beware:

  • If you disclose it all in one go, you could end up the unknown (= forgotten!) French guy who invented Vin Mariani (the Coca Cola),
  • If you disclose it trade by trade, remember that valuable IP WILL BE reverse-engineered. Trades are NOT the IP itself, they’re the key to the vault. Incidentally, this is the reason why Darwinex will NEVER publish the track-record of our members. We sure certify that it is true, but that’s no excuse to compromising your IP!
  • If you’re pitching to manage investor capital, DON’T disclose so much IP in your pitch that others can then replicate your strategy!

At all times, remember Pemberton:

  • By all means, rent the IP: allow investors to benefit from your IP via fees… but
  • NEVER give so much of your formula away that investors can replicate it without paying you going forward!
  • Before tweeting, realize that markets learn 24/7. Once you disclose IP you will (at best) share the success of your intellectual property.

PS: if the content of this post sounds too trivial to you… feel free to recommend it to good traders roaming forums, engaging in mirror-trading / copy trading / social trading sites. Looks like they missed it: trading is Intellectual Property!

 

Last News

Trading Hours for the 2020 US Thanksgiving Holidays

17 November 2020

Please note the amended Darwinex trading hours for the upcoming US Thanksgiving holiday period on 26th and 27th of November 2020.

Please note the amended Darwinex trading hours for the upcoming US Thanksgiving holiday period on 26th and 27th of November 2020.

During bank holidays spreads may be wider and liquidity may be thinner. They usually also give rise to changes to the applicable swap rates.

All times are UTC.

 Instrument November 26th 2020 November 27th 2020
COMMODITIES
XAUUSD Close at 17:44:00
Close at 18:29:00
XAGUSD
Close at 17:59:50
Close at 18:14:50
XTIUSD
Close at 17:44:50
Close at 18:29:50
XNGUSD
Close at 17:44:50
Close at 18:29:50
INDICES
J225
Close at 18:00
Close at 18:15
SPX500
Close at 18:00
Close at 18:15
NDX
Close at 18:00
Close at 18:15
WS30
Close at 18:00
Close at 18:15
STOCKS
US Stocks Closed
Close at 17:59

The rest of the assets will trade according to their usual trading time.

As always, at info@darwinex.com we’ll be happy to assist you!

apalancamiento esma

NextEra Energy Stock Split 4:1

19 October 2020

The NextEra Energy stock split is approaching. At Darwinex we will apply the stock split on October 27th.

The NextEra Energy stock split is approaching. $NEE shares will be split 4-for-1. The number of shares will be multiplied by 4 and share prices divided by this same value.

At Darwinex we will apply the stock split on Tuesday October 27th at market open.

In live accounts we will adjust open position to the split without the need to close and reopen trades. Pending orders will be cancelled. In MT5, the hedged positions will be closed and the split will be applied to the resulting net position.

In demo accounts we will close all open positions in $NEE on Monday afternoon. Pending orders will be cancelled.

$NEE stocks will be available for trading from Tuesday, October 27th, at the post-split price.

As always, at info@darwinex.com we’ll be happy to assist you!

End of Daylight Saving Time in Europe (October 25th 2020)

Please note that Daylight Saving Time (DST) ends in Europe on Sunday October 25th 2020 but our MT4 nd MT5 servers’ time is not changing until Sunday November 1st 2020 when DST ends in the US.

Please note that Daylight Saving Time (DST) ends in Europe on Sunday October 25th 2020 but our MT4 nd MT5 servers’ time is not changing until Sunday November 1st 2020 when DST ends in the US.

This means that there will be 1 week (October 25th through November 1st) where, for European users, most markets will open 1 hour earlier than during European DST, e.g. FX market will open at 21:04:01 GMT.

Instrument Trading Hours (GMT)
FX 21:05 Sun – 20:55 Fri (except 20:59:50 – 21:04:01 daily) 
DARWINS 21:05 Sun – 20:55 Fri (except 20:59 – 21:05 daily)
COMM.  
XAUUSD 22:01 Sun – 20:55 Fri (except 20:59 – 22:01 daily)
XAGUSD 22:00:01 Sun – 20:55 Fri (except 20:59:50 – 22:00:01 daily)
XTIUSD 22:00 Sun – 20:55 Fri (except 21:00:01 – 22:00 daily)
XNGUSD 22:00 Sun – 20:55 Fri (except 21:00:01 – 22:00 daily)
INDICES  
AUS200 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
STOXX50 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
FCHI40 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
GDAXI 01:30 – 21:00 (Mon – Fri)
SPA35 07:00 – 19:00 (Mon – Fri)
J225 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
UK100 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
SPX500 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
NDX 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
WS30 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
US STOCKS 13:31 -19:59 (Mon – Fri)

As always, at info@darwinex.com we’ll be glad to assist you with any question you may have!

apalancamiento esma

Margin increase for EURGBP and EURJPY this Friday (Professional Clients)

14 October 2020

Our margin requirement for the EURGBP and EURJPY pairs for Professional Clients is changing this Friday, October 16th 2020, around 17:00 BST.

Our margin requirement for the EURGBP and EURJPY pairs for Professional Clients is changing this Friday, October 16th 2020, around 17:00 BST.

The measure is due to the recent increase in market volatility.

The new margin requirement will be 1% for both EURGBP and EURJPY, replacing the previous 0.5%.

It will remain in place until further notice and will affect both existing and new positions.

Kindly make sure you have enough available margin and equity in your account for the new margin level.

Need help? Please don’t hesitate to contact us at info@darwinex.com.

apalancamiento esma

Discontinuation of cryptocurrencies from 2021

15 September 2020

From 2021 Darwinex will no longer offer cryptocurrencies. As a first step, on Monday 21 September we will deactivate the creation of new accounts.

From 2021 Darwinex will no longer offer cryptocurrencies. Their low demand from our customer base does not justify the regulatory risk involved.

As a first step towards the discontinuation of cryptocurrencies, on Monday 21 September we will deactivate the creation of new accounts.

The cryptocurrency accounts already opened will be able to continue operating until the end of the year.

Amended Trading Hours U.S. Labor Day 2020

27 August 2020

Please note the amended Darwinex trading hours for the upcoming U.S. Labor Day on September 7th, 2020. All times are UTC.

Please note the amended Darwinex trading hours for the upcoming U.S. Labor Day on September 7th, 2020. All times are UTC.

Labor Day 2020

For your convenience:

– Normal DARWIN trading hours

– Normal FX/CFD trading hours

– Annual Calendar of Amended Darwinex Trading Hours

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. -- % of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.