And that’s why the Yahoo! finance data is free…

Posted by: on May 20, 2017 in ArbMaker News! | No Comments

Earlier this month Yahoo!’s finance data feed application programming interface (or API) was changed. This made thousands of Excel spreadsheets pulling stock prices or fundamental data from Yahoo! fall over.

Our software can also pull data from Yahoo! – notably prices, earnings and ex-dividend dates.

Fortunately, when we built the software we hedged on data sources and included redundancy: there are several feeds to pick from, both free and paid. So users are covered on that count.

However, the earnings and ex-dividend dates are tougher to come by and pipe into ArbMaker elegantly. We are seeing what we can do and will update here accordingly.

Here’s one we prepared earlier…

Posted by: on May 16, 2017 in ArbMaker News! | No Comments

We profiled Healthsouth and Cooper companies in our research service back in mid-November 2016. That issue #12 can be read here.

The politics around US healthcare may have changed but it’s proved a decent trade nonetheless – we closed it again today for a 15.8% gain on a 12 day round trip. The equivalent Reg-T trade netted 7.2%.

This is the alert that went out earlier today to subscribers via instant messaging app and email:

close hls coo 3

You should try the research service – it’s completely free for 30 days and available right here.

VIX volatility and statistical arbitrage conditions

Posted by: on May 16, 2017 in ArbMaker News! | No Comments

MSCI incorporated, besides being a firm that provides a host of analytics tools for investros (amongst other services) also runs a blog. This recent entry joins the abundance of commentaries already dissecting the historically low volatility prevailing in markets as measured by the VIX index.

What makes their analysis interesting for relative value, long/short traders is this graph and commentary (our highlights):

vix msci

This tallies (albeit anecdotally) with what we have seen in our research service so far in 2017: spreads have compressed and meandered gently around fair value for many of the pairs we track. This has made pair discovery (an ArbMaker strength)  a more precious exercise than it used to be!

Spring special offer ends this Monday

Posted by: on May 13, 2017 in ArbMaker News! | No Comments

We don’t do these sales promotions often and this one ends at midnight Monday 15 2017. The discount code is:

May2017_special

and it applies to all permanent lifetime licenses. Order here!

What’s your trading process?

Posted by: on May 12, 2017 in ArbMaker News! | No Comments

(Note when reading this entry that internally we run ArbMaker on several computers each dedicated to different tasks as shown below. Clients often do as well.

For this reason we provide additional licenses at 50% off normal pricing.

If you need more than a single box to run your ArbMaker strategy email us to take advantage of this standing offer.)

…………………………………………………………………………………………

Whether it is the primary strategy or a complement fitting into a broader multi-strategy approach process is vital. When we present our product we also show how we deploy it:

process

We scan and track on dedicated machines for reasons of speed and efficiency. We pay a lot of attention to detail and we take only trades we are 100% comfortable with. There will always be other opportunities if nothing looks good today!

New to the software? Check out our support

Posted by: on May 11, 2017 in ArbMaker News! | No Comments

If you are on our mailing list you will already have received details of our special 20% off discount off Lifetime Licences offer. This expires in 4 days!

But once you pay your money then what happens? Are you abandoned?

No. When you try or buy our software you get support every step of the way. This begins with a 4 stage introduction by email covering the essentials.

Go here, for example, to see the very first email new clients receive – this includes samples, data, a video demo, what’s normality, cointegration vs correlation and more. A a preview is below:

setup1

And of course we always provide detailed email support above and beyond these intro emails.

Ready to order? That 20% discount code is May2017_special and can be used right here for any permanenet lifetime license.

Want to copy our trades but your jurisdiction cries foul?

Posted by: on May 8, 2017 in ArbMaker News! | No Comments

klinns90At the time of writing our pairs trading, relative value trade research has returned over 20% since inception. That’s a real money return in an Interactive Brokers account.

The service has been fortunate to attract a few clients and one consistent question from US subscribers has been “how can I best replicate the strategy?”

The answer is not straightforward for all subscribers. That’s because we use an equity derivative called a contract for difference (CFDs). This lets us combine leverage with the inherently hedged strategy of long/short.  However, CFDs are classed as swaps in the US and not available to non-institutional traders. Nor do Canada, Hong Kong, Australia, New Zealand or Israel allow them.

For these jurisdictions there are two obvious alternative derivatives already deployed by some of our clients:

  • Equity options
  • Single stock futures

Both require good understanding of the underlying contract structure since they differ from CFDs in one key regard: they have an expiry date. This makes trade duration important.

For example, our trades average 13 days round trip with an upper duration of 54 days. With advanced knowledge of expected duration it is easier to choose key elements like an appropriate contract date and strike price.

We provide the trades and data. Clients not enjoying CFD access choose their instruments.

So how did that Dodd-Frank trade work out?

Posted by: on Mar 16, 2017 in ArbMaker News! | No Comments

On February 7, 2017 issue #17 of our research service led with this:

hbanschwWell, the idea triggered a trade the very next day to long SCHW and hedge with a short HBAN position.

Yesterday, the position was closed at 13h01 US Eastern time ahead of the Fed’s interest rate announcement. The screenshot of the alert sent to subscribers shows the result (and uses Central European Time on the stamp):

HBAN SCHW CLOSE

A cherry-picked example for sure. But our full 2016 record is available here to download along with the rest of the harvest; and we will be publish quarterly updates.

As of this writing our internal trading account, based entirely on what is published in our research, is up +24.3% since inception in June, 2016. The S&P 500 is up +15.2%.

Subscribe directly right here.

 

The impact of US interest rate rises on stocks

Posted by: on Mar 16, 2017 in ArbMaker News! | No Comments

Yesterday the US central bank raised its base rate – the federal funds rate – to 1% continuing the move away from a ZIRP (zero interest rate policy). While exceptionally low by historical and absolute standards 1% is clearly the start of a larger tightening cycle.

Intuitively one expects more expensive credit to be a negative for equities. So why the rally? It is all about context:

intrt

That said, there is perhaps an ‘unknown unknown’ in the current story: will the unwinding of quantitative easing proceed in an orderly manner?

While there have been bouts of QE since 2007-2008 there have also been several taper tantrums. This time the fact, rather than the prospect, of a rate increase has been embraced.

So far, anyway. The past is a guide not a guarantee.

 

Analyst recommendations: well, that was helpful.

Posted by: on Mar 16, 2017 in ArbMaker News! | No Comments

President Truman asked for one-handed economists to avoid hearing “on the one hand…but on the other”. Winston Churchill complained that any meeting with 2 economists provided 2 competing views – unless one of them was John Maynard Keynes in which case you got 3.

And so it is with equity analysts who try at one and the same time to recommend but point out the probable pitfalls of their advice. Consider this graph from a Morgan Stanley research report:

cpn

It so happens it is a great piece of research. But one must wonder about the worth of the blue triangle which says a buyer might make 61%. But on the other hand he might lose 75%. And there, in between, is the ‘Lord Keynes’ view that a gain of 10% is most likely.

This is why hedging is attractive: the finest brains of analysts and economists cannot – and as a rule do not – forecast. They assess current conditions.

Judge us on performance. Read our

2016 Trading Report

+18.9% in 2016. Includes all trades made to our Interactive Brokers account

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