26 Degrees launch Pairs CFDs

26 Degrees Global Markets, a leading multi-asset prime broker 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.

Whether that be Index vs Index, Commodity vs Commodity, Equity vs Equity, Pairs CFDs allow traders to go long in one instrument and short in another, creating a single leveraged position that is treated as a single trade.

Pairs CFDs provides a simpler and more effective trading experience than traditional ‘Pairs trading’ methods. Instead of a trader having to open two separate long and short trades where risk is managed separately, Pairs CFDs provides a single ratio of the two instrument prices, which is moving depending on the price fluctuations of the two separate legs. Importantly, this allows traders to easily set stop loss and take profit levels which are far more complex to set if managing two separate trades.

Just like any other 26 Degrees asset class, Pairs CFD pricing can be streamed via API from any of their 3 trading servers in LD4, NY4 and TY3.

Pairs CFDs can also be constructed in a way that either enhances or reduces volatility, depending on the correlation of the two instruments. Take Apple vs Microsoft during a volatile price event. As the two instruments often display a negative correlation, a trader who opens a long MSF/AAP Pairs position will see a price move in the Pairs CFD that reflects the aggregate volatility of the individual instruments. Additionally, Pairs CFDs offer greater margin efficiency than trading the two instruments as individual positions because margin is only charged on one leg of the trade, just like an FX pair.

Riana Chaili, Chief Executive Officer – EMEA, highlighted the positive response from brokers already. “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 launched with an initial suite of 20 Pairs CFDs, however are constantly adding new and bespoke Pairs in response to client feedback. To find out more about the Pairs products, click here.

If you’re interested in finding out more about Pairs CFDs by 26 Degrees Global Markets, get in touch!