Caspian Launches Crypto Pairs Trading Functionality

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Caspian, the full-stack crypto trading, portfolio and risk management platform, announced the launch of its pairs trading functionality. The new capabilities are paving the way for funds looking to use statistical arbitrage and relative value-based strategies to grow their business – two strategies that have become popular in the crypto market.

Currently in use by several clients, Caspian’s market-leading price-spread and price-ratio Pairs algorithms enable funds to trade pairs using coins on any of the 35 exchanges Caspian is currently connected to, with coins and derivatives on the same or different exchanges.

“Caspian is the first full stack crypto trading platform to offer pairs algorithms, which demonstrates the maturity of the Caspian OEMS. We are seeing an increasing number of firms adopting arbitrage trading strategies to take advantage of the still inefficient cryptocurrency asset class,” said Chris Jenkins, Caspian Managing Director.

“Rather than taking a longer-term view on the value of any currency, firms with the correct technology are profiting from the temporary market inefficiencies that exist when the same coin is being traded on multiple exchanges at different prices. This is like what we saw when electronic trading of equities began to take off,” he continued.

Gabriel Wang, Aite analyst commented: “Statistical arbitrage has been a widely adopted trading strategy among traditional asset classes for quite some time. Due to the unique nature of the cryptocurrencies market, market participants need to equip themselves with technology tools to better navigate the cryptocurrency trading landscape and deal with the nuances in applying arbitrage trading strategies.”

“Caspian’s front-to-back platform is one of the better-known tools that enables market participants to implement such arbitrage strategies in what is still a nascent cryptocurrencies market.” He continued.

Key features of Caspian’s pairs trading capabilities include the ability to:

  • Trade spot, futures and perpetual swaps on one or both legs of the pair;
  • Link in-house signals or bots to the pairs algorithms through the Caspian inbound API;
  • Run many “spreads” in parallel utilizing on-screen dashboard alerts to help capture alpha across many exchanges at once;
  • Fine tune the various algo parameters to control the aggression levels on each leg taking into account the differing liquidity levels across exchanges;
  • Set rules to automatically control hedge risk in a granular way;
  • Reduce pair set-up times by cloning existing pairs and opening new pairs from dedicated watchlists; and
  • Monitor order progression slice-by-slice and amend Pairs orders on-the-fly.

The Caspian OEMS has been live for over 18 months and the pairs trading functionality went into production in recent weeks and is available out-of-the-box for all Caspian Order Execution Management System (OEMS) clients.