Personal Composite Instruments PCI
Each user of trading-analytical terminal NetTradeX PC gets access to a unique technology, providing an opportunity to create unique Personal Composite Instruments (PCI), the variations of which are restricted by user’s imagination (new cross rates, correlations between various assets, currency indexes, stock portfolios, portfolios for pair trading and many more).
by creating personal trading instruments
The technology of creating Personal Composite Instruments (PCI) is developed for technical realization of GeWorko Method (patent pending), in which, in NetTradeX trading platform, the value of the base asset (portfolio) is expressed in the value of the quoted asset (portfolio). The technology allows the following:
- Creating instruments in form of portfolios with various degrees of complexity, from very simple, including only two assets, to complex combinations, consisting of dozens and hundreds of assets.
- Including base and quoted assets in the personal instrument, which will result in opening both long and short positions, while making deals.
- Giving each component (asset) an individual weight.
- Simple and user-friendly interface of creating PCI, with an opportunity to give weights to components in units of the asset volume, in the U.S. dollars, in percents of the whole volume of the portfolio (of the base or quoted); the U.S. dollar, as an asset, can be included only in the quoted portfolio.
- Instant receiving of deep price history of personal instruments for making technical analysis.
- Maintaining the database of the created personal instruments.
Personal instruments, created by GeWorko Method, are first, used for analyzing financial markets, studying complex interrelations between assets and their combinations on historical charts, and secondly, for trading the created instruments.
Let us consider an example of trading a quite complex personal instrument, consisting of two portfolios. The base portfolio consists of three energy assets (from Commodity CFDs category, available on the terminal) - #C-BRENT, #C-NATGAS, #C-HEATOIL, the quoted portfolio consists of two commodity currencies – AUD and CAD. In our example we will set assets of the base part in the following portions of the current value of the asset: #C-BRENT - 4000 USD, #C-NATGAS - 3000 USD, #C-HEATOIL – 3000 USD (the weight of Oil is more); and assets in the quoted part – in portions, equal to 5000USD for an asset (note that in general, the values of the base and quoted portfolios can be set not equally).
A personal instrument is created (with the name “&Energy/Currency_cmd”, given by the user
We will add this instrument to the list of ''Instruments in Use'' (in ''Market Watch'' window) and will reflect on the chart with an example of simple technical analysis.
Buying 1 unit of “&Energy/Currency_com” instrument means buying corresponding commodities in volumes, set in the new instrument, and selling corresponding currencies from the quoted portfolio. Moreover, selling the AUD means selling the AUDUSD and selling the CAD means buying the USDCAD. Accordingly, selling this PCI means selling assets of the base portfolio and buying assets of the quoted one.
The user can view properties of open positions on the new instrument and on its components in the table of ''Open positions''.
Current Bid and Ask prices of PCI are calculated, based on current Bid and Ask prices of all components, taking into account their weights in the structure of the instrument. PCI is quoted to the sixth decimal point (the sum of digits before and after the decimal point), i.e. the number of digits after the decimal point will be determined and fixed at the moment of creating or modifying PCI. Due to the fact that new ticks of the components arrive at different hours, PCI spread slightly deviates from stable average value.
PCI swaps are calculated as a sum of swaps of all components of the given instrument.
The created PCI can be traded only at trading hours of its components.
Note that PCI trading actually means group operations with its components, when a series of deals can be made in given volumes and directions by one command. Created PCIs are available only on the user's terminal and deals on components arrive to NetTradeX server, where the transfer client's position to the markets of available assets and hedging are performed. Moreover, while making deals with PCI, fractional volumes appear for many components, which is not common for classic trading, but all deals arrive to the server, where all clients' deals on each asset are summed, as for the transfer and hedging, they are executed by lots (the fractional balance from the asset sum is very little and is considered by the company risk-management).
If the trader has opened a PCI position, all corresponding positions of this personal instrument components are also there in the terminal and are available to the trader. Moreover, in case the trader closes the position on even one component, that PCI ''breaks down'' (and is deleted from the PCI database), but all components remain as common positions.
Common pending and linked orders of Take Profit and Stop Loss can be set on created PCI, like on common instruments.
When calculating PCI charts, presented by "Bars" and "Candles", High and Low prices for each bar are calculated and displayed indicatively (because of much time spent on calculation for large time frames), while Open and Close prices are calculated exactly. So, for exact building of indicators and graphical objects, it is recommended to present charts by "Lines" and to use Open and Close prices for building. PCI display on the charts, of course, does not affect the accuracy of making deals and activating orders.
Limitations on working with PCI in the current version of NetTradeX terminal:
- The maximum number of PCIs per account are not more than 100;
- The maximum number of PCIs in "Instruments in Use" subset are not more than 10 per "Workspace";
- The maximum number of assets (base plus quoted) are not more than 25 per PCI;
In order to work with PCI by GeWorko Method, you should download the terminal and open an account in NetTradeX platform.
You can find the instruction how to create and apply PCI by GeWorko Method on NetTradeX terminal on ''Quick Guide'' page.
Traders and fund managers can find articles on the application of GeWorko Method in regularly updated section "Articles about the method" in IFC Markets website.