Pairs and relative value traders mining high potential trading opportunities are being offered a 'power tool' by San Francisco-based 4th Story.
4th Story, LLC, a provider of software that identifies and manages trading opportunities for broker-dealers and institutional investors, has announced the general release of 4S.Klondike, its relationship mining platform for pairs traders.
Traders use 4S.Klondike like a high-powered, tuneable sieve to quickly mine large volumes of securities data to identify pairs trading opportunities using time series analysis based on correlation, ratios, regression and other analytics.
4S.Klondike rapidly identifies pairs "nuggets" which can then be traded directly or run through a pairs trading model hosted in 4th Story's foundation product, 4S.Yellowstone, Excel or another application.
4S.Klondike is an institutional-strength tool for traders and portfolio managers to quickly find non-obvious pairs opportunities using their own custom selection criteria and ranking systems. 4th Story said the product provides full visibility and extensive graphical representation of the calculated statistics to facilitate analysis and works across multiple asset classes and data types.
Steven Smith, Chief Executive Officer of 4th Story, said: "Traders told us they were spending too much time analyzing pairs one at a time with existing tools. 4S.Klondike will tremendously increase their efficiency in uncovering the most interesting trading ideas and opportunities."
4th Story recently announced that London-based Tullett Liberty, one of the world's leading inter-dealer brokers, went live on 4S.Yellowstone software in August. The product is designed to accelerate time to market and minimize ongoing maintenance costs for trading firms that employ highly complex automated strategies.
4S.Yellowstone provides full transparency of the trading decision process regardless of asset class or type of input data (market data, fundamentals, calendar events, etc.).
Smith added that 4S.Yellowstone has been attracting significant interest from institutions on both the buyside and the sellside since it was released earlier this year.
He said: "Traders need to test ideas and put them into practice as quickly as possible. 4S.Yellowstone enables trading strategists to focus on strategies rather than infrastructure".
Background Note: 4th Story, LLC is a software firm focused on enabling trading opportunities. The company's initial product, 4S.Yellowstone, allows firms to seamlessly develop, test, optimize and operate arbitrarily complex automated strategies to take advantage of trading opportunities for single instruments or pairs.
4th Story was founded in 2002 by Philip Clem and Steven Smith. The company develops its products on the Microsoft .Net platform and is based in California's San Francisco Bay Area.
copyright hedgeweek 2003