Trading News

Bond spread reversion trading is a strategy used by fixed income traders and portfolio managers to capitalize on the mean-reverting behavior of bond spreads. This trading approach assumes that the spread between yields of different bonds or bond categories will revert to a historical mean over time. Traders exploit this by buying undervalued bonds and […]

ThinkMarkets has added a selection of new payment methods for traders in the Middle East and North Africa (MENA). This comes after it secured a license from the Dubai Financial Services Authority (DFSA) earlier in the year, enabling it to accept clients from the United Arab Emirates (UEA). Key Takeaways Apple Pay, Google Pay and […]

Momentum ignition is a sophisticated trading strategy often used in financial markets to exploit short-term price movements. It involves triggering a series of rapid transactions to create a burst of activity that can drive a stock price up or down. The idea is to prompt other market participants to join the movement, such as rules-based […]

Quantitative value trading is a strategy that combines quantitative analysis techniques with traditional value investing principles to identify undervalued stocks and assets and achieve superior returns. This approach leverages mathematical models, statistical methods, and computational power to enhance decision-making and optimize trading performance.   Key Takeaways – Quantitative Value Trading Data-Driven Analysis Quantitative value trading […]

Geographic arbitrage is a trading strategy that exploits price discrepancies of financial instruments, commodities, or assets in different geographical markets. This approach finds inefficiencies in pricing due to various factors such as time zones, market regulations, and economic conditions.   Key Takeaways – Geographic Arbitrage Trading Strategy Geographic arbitrage exploits price differences for the same […]

Synthetic arbitrage is a trading strategy that exploits price discrepancies between synthetic and actual assets. In financial markets, synthetic positions are created using derivatives such as options and futures to replicate the payoff of an actual asset. The essence of synthetic arbitrage is to capitalize on the mispricing between the synthetic and the underlying real […]

Options are heavily priced off the expected volatility of the underlying asset. Options of the same maturity would normally be expected to have the same implied volatility irrespective of the strike price. Nonetheless, in practice, the implied volatility can vary materially depending on the strike. This is called the volatility skew.   Key Takeaways – […]

Exploiting fat tails in trading is a statistical approach used in financial markets to identify and exploit anomalies in the distribution of asset returns. It focuses on the concept of kurtosis, a statistical measure that describes the shape of the distribution’s tails in relation to its overall shape.   Key Takeaways – Fat Tails in […]

While equities and practically all financial assets were battered between February 19 and March 23, 2020, those who were long volatility, and put options in particular, either hedged well against losses or even made money. Those with convex exposure to downside protection reaped remarkable returns in some cases. This ignited debate over the use of […]

Statistical Moment Trading is a quantitative trading strategy that leverages the mathematical concept of moments to analyze and predict market behavior. It involves the use of various statistical moments to understand the distribution and characteristics of asset prices, which in turn helps traders make better decisions. Mean-variance optimization is a classic approach to finance, but […]