When your investment management requires you to apply the same investment orders on multiple accounts, mirror trading can be used to automatically place the same buy-and-sell orders on multiple accounts. Even so, more efficient solutions may be needed when dynamic risk profiles are applied to different accounts. But worry not: we have the solution in the shape of our CYBMIND software.
How to Arrange Efficient Trade Mirroring
While mirror trading is an innovative method of trading, it comes with numerous downsides, including limited best execution controls, and limited risk customisation and controls. The trick is to tackle these cons head-on.
Improve Execution
Larger orders can be broken down into single accounts, sure, but then it is important to ensure that a fair, average price distribution is applied throughout. Moreover, when you’re trading derivative contracts, it’s hard to figure out the final risk exposure and the average price difference for a fraction of the said contract.
So, instead of breaking down the contract sizes as needed, why not execute one large order by sending multiple small ones without controlling the order flow and then monitoring the TCA? After all, experience has shown that, in this manner, executed prices can be improved.
Dynamic Risk Profile
Trade mirroring is usually applied with a fixed multiplier, but when you need to apply dynamic risk control, a fixed ratio simply can’t work. That is why, in such cases, it’s important to have a system that is capable of managing the order generation as one component and the risk model as another. Thanks to this, the mirroring can be applied on the signal, while the different risk models can be applied to calculate the sizes of the trades.
What’s the Best System to Run Trade Mirroring?
At Wakett, we've spent over a decade creating several modules that aid with systematic trading. These can be combined to build a flexible, scalable, and robust trading infrastructure that can be customised to every financial investor’s exact needs.
Through all this work, CYBMIND, our strategy automation software, integrated with Spotfire® Streaming was born. It’s a type of software that is able to process large datasets in real-time and apply multiple metrics to customise trading, improving your chances of success at every turn.
So, what are you waiting for? Get in touch with us to discover how CYMBIND can help you improve your trading by being tailored to your needs.