pair trading: collaboration in finance

PAIR TRADING: COLLABORATION IN FINANCEEVAN LEYBOURN

Evan LeybournLean / Agile Business Leader and Author

Melbourne, Australia

@eleybourn

http://theagiledirector.com

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AN AGILE TECHNIQUE TO

IMPROVE THE QUALITY AND PRODUCTIVITY OF STOCK TRADING

THIS IS A SIMPLE IDEA

TWO ROLES:1. DRIVER – WHO TRADES2. NAVIGATOR – WHO ADVISES

SIMPLE RULES

ROLES SWITCH EVERY ½ - 1 HOUR

SIMPLE RULES

PAIRS SWITCH EVERY DAY

HARD TO SELL, BUT

MASSIVE INCREASE IN QUALITY FOR ~15% COST OVERHEAD

SOME ADVANTAGES

1. HIGHER QUALITY TRADES

SOME ADVANTAGES

2. SKILLS AND KNOWLEDGE TRANSFER

SOME ADVANTAGES

3. SHARED KNOWLEDGE OF INDUSTRY AND COMPANIES

SOME ADVANTAGES

4. JUSTIFIABLE TRADES

SOME ADVANTAGES

5. RESILIENCE TO INTERRUPTIONS

PITFALLS AND DISADVANTAGES

1. COSTS MORE IN THE SHORT TERM

PITFALLS AND DISADVANTAGES

2. A SOCIAL SKILL THAT TAKES TIME TO LEARN

PITFALLS AND DISADVANTAGES

3. REQUIRES BOTH TO BE ACTIVELY ENGAGED ALL THE TIME

PITFALLS AND DISADVANTAGES

4. BONUSES NEED TO BE SHARED ACROSS THE TEAM

UNSURE ABOUT THE VALUE OF PAIR TRADING

EXPERIMENT, MEASURE AND EVALUATE

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DIRECTING THE AGILE ORGANISATIONBY EVAN LEYBOURN

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