Who Are We
Stirling Bosch is an algorithmic trading firm that utilizes proprietary ideas, software and research to
deploy solely its own capital. Our team is comprised of talented, bright individuals with experience in trading, market microstructure, low latency systems and data analysis. We are about science.
What Do We Do
Stirling Bosch is on the cutting edge of quantitative trading, a lucrative field that provides exciting challenges in predictive modeling, systems engineering, computer science and finance. We combine huge amounts of
data, intense computing power, financial expertise and intuition to develop sophisticated trading models.
How Do We Do It?
At Stirling Bosch, we clear our trades through FCA authorised and regulated brokers. We have developed our own in-house FIX API capable of optimising and backtesting decades of data to create complex equity and currency based co-integration and correlated statistical arbitrage algorithms.
Co-Integrated Statistical Arbitrage
Statistical arbitrage, or StatArb, as opposed to (deterministic) arbitrage, is related to the statistical mi-spricing of one or more assets based on the expected value of these assets.
As a trading strategy, statistical arbitrage is a heavily quantitative and computational approach to equity trading. It describes a variety of automated trading systems which commonly make use of data mining, statistical methods and artificial intelligence techniques. A popular strategy is pairs trade, in which stocks are put into pairs by fundamental or market-based similarities. When one stock in a pair outperforms the other, the poorer performing stock is bought long with the expectation that it will climb towards its outperforming partner, the other is sold short. This hedges risk from whole-market movements.
Event Driven Derivatives
Earnings announcements are public announcements that display a company’s earnings, or lack thereof. These usually take place on a quarterly basis. This number is generally quantified as “earnings per share.” It’s important to understand how earnings can affect an underlying, as well as that underlying’s option market.
When it comes to movement in the underlying based on earnings, it can be especially confusing. There are times where earnings exceed expectations, but the stock price still goes down. There are also times where earnings miss expectations, but the stock price goes up. That is why we stick to trading the implied volatility aspect of earnings – directionally trading earnings can be extremely difficult, while implied volatility usually expands before earnings, and contracts immediately after.
The currency markets are extremely liquid, and extremely high risk. Years of discretionary trading has enabled an understanding of the inter-connectivity of almost every currency pair, and how a small move with one positively correlated asset can translate to a larger move elsewhere.
We have developed a number of algorithms that identify trends and momentum breakouts based on the volume, market depth and specific sentiment of the market. Using complex models such as the Crowd Behavioural Flow Model, we have created programs that capitalise on large breakouts identified through trading patterns, and continue to profit after successfully identifying a trend.
We understand and recognise that diversification is key to a successful and sustainable portfolio. Whilst we feel that our company has a vast array of talent, we also know that it would be impossible and irresponsible to not take full advantage of the talent elsewhere in the world.
As a fund, we invest a portion of both our capital and earnings into other regulated funds performing consistently well with a verifiable track record. This allows Stirling Bosch to invest in assets we otherwise wouldn’t be able to.
Interested in more information?