Pairs Traders - which firm is best?

[Don Bright]

Quote from RandyM85:

Can someone explain to me what the definition of "pairs trading" is? Thanks.

What is Pair Trading?
Pair trading, also known as statistical arbitrage or spread trading, is a strategy that allows the trader to capture anomalies, relative strength or even fundamental differences on two stocks or baskets while maintaining a market neutral position. This powerful trading strategy once used only by large institutional investors and hedge funds has been adapted for implementation in your taxable trading accounts. Market neutrality has never been more important, as it allows ..more; http://www.pairtrader.com/subject2.html

Don

 

[Don Bright]

Quote from hawkeye222:

How long do you usually hold your pairs? My hold time is about 15-30 min. I usually pair a stock with an ETF to avoid slippage.

MSCHEY - how many trades do you usually do per day? - per pair

Several pairs strategies in use by about 120 or so of our traders. some trade 5-10 pairs a few times per day each. Some may have 100 or more pairs, and trade them a few times per week...all depends on individual trading goals.

For example, we have about 100 pairs divided between a few of us, we trade each pair at least once per week (unless there is absolutely no movement of course), but we have "high frequency" pairs that may trade several times per day. With good software, this becomes second nature.

And...we have quite a number of traders who only trade 3 or 4 pairs, grabbing dimes and quarter when they can and going home relatively flat.

Really depends on the traders personal make up.

All the best,

Don