Abstract: Suppose you are raising capital to trade on a profitable new stock-picking strategy. You approach a wealthy investor, Alice, for seed funding. Alice is open to the idea that you might have stock-picking skill, but she is also skeptical. Since you are just starting out and do not have a track record to show Alice, the conventional wisdom is that you must reveal some information about how you pick stocks in order to convince her that you can do it. This would be bad news if true. Reveal too much and Alice will be able to reverse engineer your approach, leaving you empty handed. Luckily for you, the conventional wisdom is wrong. In this paper, I show how to give Alice a zero-cost zero-knowledge proof that you know about a profitable new way to pick stocks. This new proof system makes it possible to construct a spot market for profitable trading ideas.

Bio: Alex Chinco is an Assistant Professor of Finance at the Zicklin School of Business at Baruch College, City University of New York. He earned his PhD in Finance from New York University. His research interests center on the areas of behavioral finance, asset pricing, and machine learning. 

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