Maximum Adverse Excursion (MAE)
The Maximum Adverse Excursion (MAE) measures the potential loss or distance a trade has moved against you. Traders use the MAE to determine where to place a stop-loss order for their trading system. The MAE …
The Maximum Adverse Excursion (MAE) measures the potential loss or distance a trade has moved against you. Traders use the MAE to determine where to place a stop-loss order for their trading system. The MAE …
Profit Factor is a trading performance indicator defined as the ratio of gross profits to gross losses. A Profit Factor greater than 1.0 denotes a profitable system; a factor of 2.0 or more is good, …
Dark pools are an alternative trading system (ATS) that allows institutional investors to conduct massive trades without disclosing details on the public exchange unless executed. They are legal and regulated by the Securities and Exchange …
Time-weighted average price (TWAP) calculates the weighted average price of the security over a particular time period. TWAP is often implemented as an order execution strategy to execute massive trades by breaking them into equal …
Volume Weighted Average Price (VWAP) is the average trading price of an asset throughout the day using price weighted by volume. It provides traders an insight into the price trend where volume is highest. Institutions …
ETF Arbitrage is a strategy through which traders earn a profit by exploiting the price discrepancy between an ETF and its underlying assets or related securities. This process eventually results in an equilibrium price as …
Volatility Arbitrage is a form of statistical arbitrage used in options trading. This trading technique exploits the difference between an option’s implied volatility and the underlying asset’s actual volatility. Vol Arb is usually implemented in …
Information arbitrage identifies market-moving information and trades on it before the financial markets recognize its impact. The disparity in knowledge across markets and its timing creates information arbitrage opportunities. Information arbitrageurs discover market-moving information from …
Arbitrage is a trading strategy that exploits an assets’ price or information discrepancies for profit. These differences arise due to market inefficiencies. Market neutral strategies such as buying and selling the same investment on two …
Social Information Arbitrage is a form of arbitrage trading that scrutinizes trending topics to identify price-impacting information and exploits that information before the market factors it in thoroughly. Traders can spot such insightful trends on …