just now
Leading multi-asset prime broker 26 Degrees Global Markets has announced the launch of their new trading product, Pairs CFDs. Built in-house and offered exclusively to broker dealers, Pairs CFDs provide traders with the ability to trade any two instruments against each other as a single instrument, just like an FX pair.
The Pairs CFDs product enables trading across various asset classes, including Index vs Index, Commodity vs Commodity, and Equity vs Equity. Traders can take a long position in one instrument and a short position in another, creating a single leveraged position treated as one trade.
According to the company, Pairs CFDs aims to provide a more streamlined trading experience compared to traditional 'Pairs trading' methods. Instead of managing two separate long and short trades with individual risk management, Pairs CFDs offers a single ratio of the two instrument prices that fluctuates based on the price movements of the separate legs. This feature allows traders to set stop loss and take profit levels more easily.
26 Degrees' Pairs CFD pricing can be streamed via API from any of their three trading servers located in LD4, NY4, and TY3, consistent with other 26 Degrees asset classes. The product can be structured to either enhance or reduce volatility, depending on the correlation between the two instruments. For example, during a volatile price event involving Apple and Microsoft stocks, which often display a negative correlation, a trader opening a long MSF/AAP Pairs position would see a price move in the Pairs CFD reflecting the aggregate volatility of the individual instruments.
Additionally, the company claims that Pairs CFDs offer improved margin efficiency compared to trading two instruments as individual positions, as margin is only charged on one leg of the trade, similar to an FX pair.
Gavin White, Group CEO, 26 Degrees Global Markets
Gavin White, Group Chief Executive Officer at 26 Degrees Global Markets, commented on the launch: "No one else in the world is currently offering what we have developed. Our extremely talented team has built the technology whereby brokers can potentially offer their clients 100's of new and unique Pairs, traded as a single position. What is most exciting is how powerful these instruments can be around big news events like elections and earnings releases because of the heightened exposure they can provide. We believe this presents a significant opportunity for brokers to offer a bespoke suite of highly relevant Pairs instruments to their clients and stand out from their competitors."
Riana Chaili, EMEA CEO, 26 Degrees
Riana Chaili, Chief Executive Officer - EMEA, noted the positive initial response from brokers: "Those initial discussions we have had with some of our key broker clients have been extremely positive and provided a lot of valuable insights. Specifically, the ability for brokers to request bespoke new Pairs and within a short period, be able to show their clients a price in a unique instrument was well received and highlighted the sophistication and efficiency of the product build."
26 Degrees has launched with an initial suite of 20 Pairs CFDs and reports that they are continually adding new and bespoke Pairs in response to client feedback.
