Spread Trading on Forex and futures
PathFinder Trader™ allows you to receive and merge quotes coming from different counterparts using the same underlying technology and contract or currency pair names. For example you can create and trade on a contract which is made by the spread difference between the EUR/USD delivered from our Currenex A Data Feed and the Currenex C Data Feed.
Build Arbitrage Contracts
You can build complex arbitrage strategies made out of different contracts or currency pairs. If you also have a futures account you can even create tradable arbitrage contracts by building a contract made out of a forex currency pair and the underlying future contract.
If you are a system trader you can benefit from the platform’s auto-execution capability. You can design strategies which may generate orders to be sent to multiple ECNs or different contracts or currency pairs.
- Strategies using combinations of positions, such as spreads, may be as risky as outright long or short positions. Please be aware of your margin when trading using these products.
Intercommodity Spreads are Arbitrage strategies developed by creating synthetic contracts deriving from 2 different contracts which are correlated because of their underlying asset.
With Pathfinder Trader™, not only you can create such spreads by creating synthetic contracts made of 2 similar pairs, but also by creating spreads made of two different type of contracts. For example, you can build a spread made out of the EUR/USD and the US dollar Index traded on the ICE.
Synthetic currency Pairs
You can build Synthetic Currency Spreads not offered by the liquidity provider. Assume you want to trade the JPY/MXN which is not available among the list of currency pairs offered.
You can easily build by selecting the USD/MXN on the first leg, and the USD/JPY on the second. Add the contract to your quoteboard to chart it or to trade it through the DOM.
Intermarket Forex Spreads
Intermarket Spreads are very popular among future traders. Thanks to the Multi Connectivity capability of Pathfinder Trader™, you can trade such spreads on forex too. An intermarket spread is a synthetic contract built using equal contracts offered through different exchanges.
With PathFinder Trader™ you can build Intermarket spreads by selecting equal forex pairs streaming from different liquidity providers.
Correlation Charts & Tradable contracts
Even if you are not a spread trader, you can take advantage of the unique capabilites to create synthetic contracts. Once created a synthetic spread, your contract will perform like any other in your quote board.
You can open it into a chart to build a correlation indicator, or to track price inefficiencies.
You can open the Scalper Book, to manually trade the contract, or you can even apply your Automated trading Strategies created using the Powerscript Language.
- News Traders
Build Synthetic Contracts to distribute your order across the pairs
Trade on Price and Volume inefficencies using synthetic Intermarket Forex Spreads.
- Classic Spread Traders
Expand your opportunities by creating spreads made out of different contracts.
- Arbitrage Traders
Seek market inefficiencies by creating spreads out of different contracts.
- Hedging On Forex
With PathFinder Trader™, you can go open opposite positions on the same pairs through different Providers.
Frequently Asked Questions
You can build many kinds of spreads using PathFinder Trader™, including the classic intra-market, inter-market and inter-exchange, or other custom spreads based on Arbitrage and inefficiencies for example between futures and Forex.
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Yes, you can build a spread using any of the products available on PathFinder Trader™ including products within the same Data Feed.
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When you send a Buy order, the Long Leg will be the contract that you will buy and, at the same time, the Short Leg will be the contract that you will sell. Conversely, when you send a Sell order, then you will be Selling the Long Leg and, at the same time, Buying the Short leg.
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Yes, you can. Technically you could build this contract for example using the EuroDollar Futures currency (EuroFX) vs. the EURUSD on forex.
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Yes, you can. Just select the different Futures expiration available for that contract.
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If you go long for example on EURUSD on CNXa and short EURUSD on CNXb your position will result in a hedged position with separate counterparts. Therefore, although in theory you are flat, in reality you have two separate open positions.
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You can hedge your positions only if you have two separate trading accounts and you go long on one and short on the other one. However, keep in mind that because the positions are margined separately for each trading account, you still run the risk of incurring in a margin call and eventually liquidation.
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Yes, of course! Any symbol, either hardcoded or synthetic, available on PathFinder Trader™ can be used to trade through an automated strategy or manually.
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