PROFESSIONAL TRADING HAS BEEN A PASSION AT CD GROUP !

The company has a sizeable proprietary book and does various types of proprietary trading activities like day trading, arbitrage, options trading, currencies trading, currencies options. The company has developed manual as well as algorithmic strategies based on which its proprietary desk is actively trading the different market segments and different financial products.

The company has developed an in-house training programme, which can give a time bound but a comprehensive training to a novice trader and prepare him for live trading. The programme starts at a basic level which explains the fundamentals of stocks, currencies, commodities markets the trading opportunities available, numerous case-studies of past market movements, past trading results and case-studies of past trading styles of various professional traders. This programme is suitable even for a fresher who wishes to make professional trading as his career.

The advanced level of In-house training is given to experienced traders at CD Group, and this is an on-going programme as we firmly believe that financial and commodities markets are constantly evolving and the trading style or strategy can never be a constant, and once has to constantly keep on adapting to changes in the environment in order to stay at the top of the trading environment.

The advanced level programme involves wide ranging complex trading strategies, options strategies, options v/s. futures, trading pairs etc. and also acclimates the advanced trader with automated trading platforms, complex algorithms and latest trading technologies.

This In-house training programme is being designed and constantly monitored, modified by the existing senior professional traders along with top level management and this constant learning process and innovative methods are the pillar stones for the success of Professional Trading Team at CD Group.

PROFESSIONAL TRADING

Professional Trading is an art as well as science ! At CD Group, professional trading has been a passion and challenge and the Professional Trading Group has been consistently exploiting the exciting opportunities on a daily basis.

Professional Trading is one of the relatively safer ways of making consistent money from trading any volatile market and here money can be made irrespective of bullish or bearish markets, as basically ultra short term trends are exploited by trading strategies and also normally the open positions of a trade does not last long enough which also limits the down side risk of the trades. The more the liquidity and volatility of any market, the more are the opportunities of making money in professional trading. While investors try and avoid participation during some big event days in the markets (like Union Budget, Election Results etc.), such volatile days are some of the best days for the professional trader.

The qualities needed for a successful professional trader are agile mind, quick decision making, fast trade execution, strong risk management and analytical strength. It is an exciting world of trading and the only “constant” here is “change”. Professional Trading is probably the only one exciting and lucrative full time career in the ever changing, erratic, dynamic world of financial markets, and even after being a hands on full time trader, you are still not affected by the vagaries of the financial markets. High volume based professional trading provides liquidity and price discovery in efficient markets.

At CD Group, Professional Trading has been a niche area since the inception of C. D. Integrated Services Ltd., and Parashar Patel himself has been and still is an active professional trader and constantly tries to evolve himself as well as his team of professional traders to stay at the top end of trading activity. The group has evolved a comprehensive in-house training programme, which helps in honing the skills of a trader, from basics to advanced level, and this training programme is a continuous programme, as a trader would need continuous study and mentoring to exploit his skill levels to the maximum.

Professional Trading is a wide area of activities, which mainly contains day trading, jobbing, arbitrage between spot and futures, arbitrage between futures to futures (spreads), options arbitrage, options and futures arbitrage, inter-exchange arbitrage, pair trading, directional strategies, cross currencies and a host of other strategies, which can be exploited by a trader on a daily basis and this is what is being done successfully on a consistent basis since last 15 years at the Professional Trading Group of our company.

Earlier, most of the trading done was manual, a lot of human intervention was required and now with the Regulator approving algorithm based trading, the focus has shifted to automated trading, use of latest trading platforms, trading softwares, latest technology with minimum latency, robust technology infrastructure and risk management systems and human intervention is at its minimum, and the technology and trading strategy is at the forefront of a professional trader. Though the core trading logic remains intact, with changing environment, changing market micro-structure, the manual logic of trading the market can be fed into a computer recognized language / program and after successful back testing of the logic / program / software such created, it can be implemented into the live trading environment and trading opportunities can be exploited. The result of this is that though a lot of time, energy and resources need to be invested to develop an automated trading strategy or program, but once it is developed, back tested successfully and put into live trading environment, this trading program can perform quite efficiently, it can simultaneously trade “n” number of stocks / assets, execute the trades in mili-seconds and being fully technology and logic driven, there would be no emotional intervention.

So, now days, most of the professional trading desks make greater and greater use of technology and invest in hardware and software resources and as a result, the share of algorithmic trading in the total business volumes of an exchange is increasing by the day.

At CD group, we have taken note of the current trends, can also foresee the future trends and we are also constantly evolving and incorporating the state of the art infrastructure and technology, with the sole objective of staying on the top end of the trading environment, keep our professional traders aware and agile so that they can also exploit the opportunities in automated trading and we are sure that just as in the last 15 years, our professional trading group has been a success story, we shall even be more strong, prepared and ready to face the challenges that future lies in store for us.

ARBITRAGE ACTIVITY

Focusing on capital protection and attractive returns

The Company has strong focus on arbitrage opportunities coming out from the market, and tries to explore these emerging opportunities to the fullest, both in the stock markets as well as commodities markets.

Arbitrage is a safe technique, whereby the capital deployed is protected and the returns achieved are attractive compared to other conventional avenues. It requires specialized skills on part of arbitrageurs (person doing arbitrage). The basic meaning of arbitrage is buying where price of a stock is low and selling where price of the stock is high (simultaneously) and reversing the above created position when the spread gets lower. This means once the position is created, it becomes a hedged position and so it is not relevant whether the market (or that stock / commodity price) moves up or down, one needs to only look at the difference in price when this position is created and the profitability when it is reversed.

There was geographical arbitrage opportunity earlier (when different exchanges had different settlement systems) but now since inception of rolling settlements (daily settlements), these opportunities are almost non-existent. Now, with introduction of derivatives trading, concept of time arbitrage has come, where one can create positions by buying from spot market and selling in futures market (or options market), or creating positions in the futures, options market between a basket of securities, or vice versa and reversing the same position with profitable spreads.

The ARBITRAGE PRODUCTS GROUP of CD Group has trained and developed lot of arbitrageurs (traders), who have taken up this activity as a profession and after initial training and constant inputs thereafter, they are successfully doing this activity on daily basis. This group also does arbitrage activity on behalf of High Networth Individuals and has attractive products to offer.

The Arbitrage Products Group specializes in identifying and executing arbitrage strategies, both in stock markets and commodities markets, which are relatively risk free and offer relatively more returns, than other conventional avenues. The focus of the group has been to protect capital of clients in volatile markets and offer attractive returns as compared to other conventional avenues.

Current Products that the Group focuses on, in Stock Markets, are :-

  • Cash – Futures Arbitrage
  • Reverse Cash – Futures Arbitrage
  • Index Arbitrage

Cash – Futures Arbitrage

If a stock trades around Rs. 250 in spot markets & Rs. 253.50 in (near month) futures market, this spread turns out to an annualized return of 16.80%. Here, one can buy in cash market & sell in futures market. If the price difference reduces drastically in the following days, or even the same day, one can reversed the position and book profits. If the positions cannot be reversed immediately or shortly, at the last trading day of the near month contract, the prices would converge and the positions can be reversed. Such a method can be employed, when the cost of carry in any stock is more than the opportunity cost. Since this is a completely hedged position, there is no effect on profitability due to the market swings either up or down.

Reverse Cash – Futures Arbitrage

Sometimes, the stock futures trade at a discount to its underlying spot prices. Such opportunities arise when the demand for a stock is more than its supply. In such cases, if one holds such stock, one can buy the same in futures market and sell it simultaneously in spot market, earning a risk free return + temporary funds from the sale proceeds of the stock. The position can be reversed when the differences converge, or on the expiration day of the futures contract, when the prices in spot market and futures market are bound to converge.

Index Arbitrage

Index Arbitrage can be divided into two broad strategies

Arbitrage between Nifty futures (in futures market) and its underlying stocks (in spot market) : When Nifty futures is quoting at a higher cost of carry (than the
opportunity cost), then its spot price, one can buy the underlying stocks from spot markets (in same proportion to their weight age in Nifty Index) and sell nifty futures, and the reverse leg of the same can be done when the difference narrows or at the last day of near month contract, when the price of spot and futures market converges. There is no market risk involved in this transaction. There is a trading mechanism, where at one stroke, one can buy or sell a basket of securities, of predetermined value.

Arbitrage between Nifty futures and underlying stock futures (basis arbitrage) : There are situations, where nifty futures is trading at a discount to underlying spot nifty and its constituent stock futures are trading at a premium to underlying spot prices. Here one can create a long position in Nifty futures and simultaneous short
positions in its underlying stock futures, taking advantage of the basis between the two. These positions can either be reversed or at expiration of near month, they shall automatically be squared up by exchange at the closing prices (since as of now, derivative contracts are cash settled).

CD Integrated Services Ltd. 2005 All rights reserved | SEBI SINGLE REGISTRATION NUMBER: INZ000190932 | NSE SEBI Registration No. Cash Segment: INB-231094237 |
NSE SEBI Registration No. F&O Segment: INF-231094237 | NSE SEBI Registration No. CDS: INE-231094237 |
BSE SEBI Registration No. Cash Segment : INB011094233 | BSE SEBI Registration No. F&O Segment : INF011094233