My Pair Trading Journal

Hello

Thanks for the reply. I think i know the issue (but the solution needs to be implemented inside PTF )

PTF is accepting the yahoo symbols and then adding the suffix .NS internally for all the NSE tickers (based on the exchange selected), as the nifty index tickers for yahoo is ^NSEI i.e without the .NS, it is not accepted as a valid symbol on yahoo.

Now instead of NSE if we select any American exchange and then pass the ^NSEI symbol, it is accepted as valid but here again the data does not come.

Thanks

Hi All,

Can anybody tell me, which broker gives attractive deal for “Pairs Trading”?

As the risk is less/market neutral strategy, I guess some broker will give discount on total margin etc.
If anybody enjoying any discount on margin(for Pairs Trading)/ pls share such experience so that new faces in Pairs Trading wil get benefited….

Also which Broker’s software is most suited for Pairs Trading in your experience like separate icon/tab for executing pair trade etc.

Thanks in advance for your replies....

I trade with Zerodha. I have asked them about this but they are unlikely to give any special benefits....also told no brokers in India will pass that benefit.

They will only give benefit between calender spreads at MCX, such as GOLD current month-next month etc.

I don't know about any other broker. But perhaps some will give. We need to search.

This will benefit us immensely as the margin required in this case would be drastically lower and one could take more positions to balance the overall risk.

Drop here if anyone find such brokers.

Yes PT, I have also noted this. Once I thought how can we decode that PTF software; inject external data, and then recompile it---needs a lot of programming from Russia...ha ha..

yep and russian traders would not want to buy it in the first place :lol:

As per my discussions with 2-3 brokers, they do not provide any additional benefits for Pairs Trading and as of not do not intend to do so........ It may be becos they do not want many people to become aware of this strategy as they also provide this strategy / recommendations to their HNI customers!!!

As regards the software, while discussing some features of Trade Tiger, a senior IT personnel of Sharekhan informed that they are currently building some Pairs Trading friendly features in Trade Tiger, which is currently in development / testing phase. We can expect some good features in Trade Tiger soon.

NO BROKER AROUND THE WORLD PROVIDES ANY BENEFIT IN PAIRS TRADING!!

though its mkt neutral strategy, its common sense that there cant be any benefit given by any broker in this world for pair trading as they are different underlying which have different kinds of market risks associated with it.

as far as the calendar spread is concerned, its but obvious that the margin will be bare minimum as its the same underlying with different month contracts! btw any benefit given here is terms of margin is courtesy exchange & not broker specific and if any broker asks for more margin than the actual bare minimum, you can sue their *****!

also, sharekhan is only working to provide pair trading recommendations in future (also done in past) through their TT s/w. it is just a pop up which comes whenever they feel any trade-able opportunity comes. NO WHERE NEAR TO PTF WHICH IS A COMPLETE S/W and they are not interested in building anything close to it! IT guy must have misguided or his explanation has been misinterpreted!

Hi Malgohft,
The IT guy did not promise / inform me of any system for Pairs Trading like PTF. All that he mentioned was that there will be a feature in TT, with which one can enter the trade using Ratio / Spread of the Pair & monitor it, something like that. It may not be able to provide any recommendations like which pair is better to trade using correlation / co-integration. That will need to be figured out by us independently. TT will only help in entering the trade appropriately.

For pairs trading signals, they (like other brokers) may be using some proprietary software to identify pairs. These recommendations may be available only for their clients who have opted for PMS or other paid services and will not be an 'Open For All' software / app.

Hi Malgohft,

Actually INTERACTIVE BROKERS (IB) in US market giving a huge discount for pairs trading and that is not for all pairs. For index futures they are giving that’s for Dow jones Vs Nasdaq, S&P 500 Vs Nasdaq and also for Crude Oil Vs Natural Gas, Crude Oil Vs Heating Oil etc.
And so many other brokers in US also implemented the same.

I think Indian regulators are very tough on such discounts and that’s why no brokers giving discounts. One can say that’s why Indian Financial System is stronger even when the sub-prime crisis/recession occurred in 2008 than other countries.
But one can think logically, in case of index futures one single index won’t collapse in a single day, all other index also follow it, if it’s in the same market/country. Likewise WPI Crude Oil, Natural Gas and Heating Oil are all coming from a single raw material. That’s why they are giving discount and they also cut our positions automatically if one is running shortage of capital in extreme cases.

Recently Interactive Brokers started it’s operation in India, but so far they are not giving any discounts in Indian market. That may be becoz of strong regulations from Excange and SEBI.

if ur a sharekhan client you can avail this facility for free! infact, till date sharekhan has only recommended 1 pair trading strategy (nifty & bank nifty) few months back! i am in touch with the guy who heads this research & product dev team in sharekhan!

BTW ITS OPEN FOR ALL SERVICE! (sharekhan users must be knowing this)

in trade tiger: go to user settings>research & select whichever recos you want. once they recommend anything it will be a pop in ur TT screen & alternatively you can check them in research>todays' calls & updates

also, what ur mentioning is the part of TT 2.4.0.5 which is gonna release shortly! this is one of the new features which they will be adding!