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  2. Trading strategy - Wikipedia

    en.wikipedia.org/wiki/Trading_strategy

    The trading strategy is developed by the following methods: Automated trading; by programming or by visual development. Trading Plan Creation; by creating a detailed and defined set of rules that guide the trader into and through the trading process with entry and exit techniques clearly outlined and risk, reward parameters established from the outset.

  3. Butterfly (options) - Wikipedia

    en.wikipedia.org/wiki/Butterfly_(options)

    A long butterfly options strategy consists of the following options: Long 1 call with a strike price of (X − a) Short 2 calls with a strike price of X; Long 1 call with a strike price of (X + a) where X = the spot price (i.e. current market price of underlying) and a > 0. Using put–call parity a long butterfly can also be created as follows:

  4. Statistical arbitrage - Wikipedia

    en.wikipedia.org/wiki/Statistical_arbitrage

    In finance, statistical arbitrage (often abbreviated as Stat Arb or StatArb) is a class of short-term financial trading strategies that employ mean reversion models involving broadly diversified portfolios of securities (hundreds to thousands) held for short periods of time (generally seconds to days). These strategies are supported by ...

  5. Pivot point (technical analysis) - Wikipedia

    en.wikipedia.org/wiki/Pivot_point_(technical...

    The first and most significant level of support (S 1) and resistance (R 1) is obtained by recognition of the upper and the lower halves of the prior trading range, defined by the trading above the pivot point (H − P), and below it (P − L). The first resistance on the up-side of the market is given by the lower width of prior trading added ...

  6. Options arbitrage - Wikipedia

    en.wikipedia.org/wiki/Options_arbitrage

    Options arbitrage is a trading strategy using arbitrage in the options market to earn small profits with very little or zero risk.. Traders perform conversions when options are relatively overpriced by purchasing stock and selling the equivalent options position.

  7. Systematic trading - Wikipedia

    en.wikipedia.org/wiki/Systematic_trading

    Systematic trading (also known as mechanical trading) is a way of defining trade goals, risk controls and rules that can make investment and trading decisions in a methodical way. [ 1 ] Systematic trading includes both manual trading of systems, and full or partial automation using computers.

  8. Pairs trade - Wikipedia

    en.wikipedia.org/wiki/Pairs_trade

    Trading pairs is not a risk-free strategy. The difficulty comes when prices of the two securities begin to drift apart, i.e. the spread begins to trend instead of reverting to the original mean. Dealing with such adverse situations requires strict risk management rules, which have the trader exit an unprofitable trade as soon as the original ...

  9. Correlation trading - Wikipedia

    en.wikipedia.org/wiki/Correlation_trading

    In finance, correlation trading is a strategy in which the investor gets exposure to the average correlation of an index.. The key to correlation trading is being able to predict when future realized correlation amongst the stocks of a particular index will be greater or less than the "implied" correlation level derived from derivatives on the index and its single stocks.