Pair Trade Library System for Rapid Execution
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Solution Overview
Problem
The existing pair trading practices require significant time for investors to formulate and submit pair trade requests due to numerous parameters, which can lead to missed profitable opportunities in fast-moving markets.
Innovation Solution
A system and method that allows for the retrieval and modification of previously configured pair trade requests from an archive or library, including parameters like buy and sell symbols, quantities, ratios, and slippage amounts, with shortcuts for automatic modifications, enabling rapid submission of pair trade requests through a pair trade fulfillment module.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Measurement precision
If an investor manually formulates a pair trade request specifying all parameters, then the trade can be executed with precise control, but it takes significant time to prepare and submit the request
Solution Approach 1:
The system stores previously configured pair trade requests with all parameters pre-specified. When a trading opportunity arises, the investor can retrieve and reuse these pre-configured requests, eliminating the need to manually specify all parameters again. This preliminary configuration resolves the contradiction by having parameters ready in advance while maintaining precision through the stored specifications.
Solution Approach 2:
The system allows investors to copy existing pair trade requests and their parameter configurations. By duplicating proven trade setups, investors can quickly deploy identical strategies without re-specifying parameters, thus reducing preparation time while maintaining the same level of parameter control and precision.
2Adaptability or versatility
If an investor specifies all required parameters for a pair trade request, then the trade execution can be precisely controlled, but the process becomes complex and time-consuming
Solution Approach 1:
The system pre-configures pair trade requests with all necessary parameters already specified and stored. This eliminates the need for investors to navigate through numerous parameter fields during active trading, reducing the perceived complexity while maintaining full adaptability through the stored configurations.
Solution Approach 2:
The system extracts and separates the complex parameter specification process from the active trading decision-making process. By storing parameters in advance, the system removes the burden of specifying numerous parameters during time-sensitive trading moments, simplifying the user experience while preserving comprehensive control options.
3Reliability
If an investor waits to formulate a pair trade request after identifying a market opportunity, then the analysis can be thorough, but the opportunity may be missed in fast-moving markets
Solution Approach 1:
The system enables investors to perform thorough analysis and configure trade parameters in advance, storing these configurations for future use. When a market opportunity arises, the pre-analyzed and pre-configured requests can be immediately deployed, ensuring both thorough analysis and rapid response without compromising either reliability or speed.
Data Source
AI summary
A method for trading a pair of securities is provided and includes the step of retrieving a previously configured pair trade request and the previously configured pair trade request is submitted to a pair trade fulfillment module.