Trading Like a Math Geek

On Wednesday we held a webinar about Statistical Arbitrage Spread Trading.  We had a lot of people tune in, and there were some great questions.  Thanks to everyone who attended.  If you missed it, you can see the replay at the bottom of this post.

Statistical Arbitrage spread trading is a way to harness your inner Math Geek to make more money trading.  There are a lot of mathematical concepts, but you can design your trading strategy to be very mathematically strict or just use the mathematics as a framework to exploit relative value opportunities.  It is up to you and your trading style.  In the webinar we discussed the mathematical concepts of cointegration, zscore, and half-life.  We went through a real-life example using the spread 1* $BOH – 2* $PACW.  You can bring up this spread in Spread Analyzer using this link. You can also look at some of the other spreads we talked about such as $FDX and $UPS, $PEP and $KO, or try coming up with some on your own. When you bring them up in Spread Analyzer, hit the “Tweet” button near the top of the output page and include my twitter id @slimshappy so I can see what spreads you are looking at.

Please send me any feedback or questions on twitter or post them here.  I hope you can attend our next webinar!

Written by Jennifer Galperin.  Follow me on twitter and stocktwits.

 

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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