Trading Neutrality: Understanding Beta Neutral and Dollar Neutral in PairTrade Finder®

Trading Neutrality: Understanding Beta Neutral and Dollar Neutral in PairTrade Finder®

PTF is dollar neutral as we've found in our testing that being dollar neutral is more profitable​.


Trading dollar neutral has nothing to do with the spread, buying 10k long and selling 10k short is computed by 10k / share price = qty of shares to trade, PTF computes signals based on the standard deviation from the mean based on the ratio of stock1/stock2, the spread chart in the pair charts window is a simple stockprice1-stockprice2.