US online trading services provider Interactive Brokers Group, Inc. (NASDAQ:IBKR) is offering users of its multi-asset trading platform Trader Workstation (TWS) to invest with Portfolio Builder.
The Portfolio Builder is a tool that lets traders create research data-driven portfolio strategies, evaluate their simulated historical performance up to three years back, and then invest funds and submit orders to create the portfolio.
The tool can be accessed from the Trade section of the New Window dropdown, by clicking Create a New Strategy.
- Investment Amount and Long/Short Leverage
These functionalities enable users to specify an investment amount that will be used to calculate simulated historical performance, and then specify the percentage of that amount one wants to allocate to creating long (up to 500%) and short (up to 300%) positions.
This feature allows traders to define the universe of equities using index and price filters.
- Investment Strategy
This option enables traders to define how their new portfolio strategy should invest. Traders can invest in stocks according to their ranking by 11 top research providers.
- Backtest Settings
These are used to set the time period over which back testing results are displayed and the index against which performance is charted. One can optimize the weight of positions based on highest return, lowest variance or highest Sharpe ratio, and the weight of ranking providers.
- Using Portfolio Builder to Invest
The results are displayed directly in the larger Portfolio Builder tool as traders make their selections. Once they are satisfied with their investment rules and backtesting results, they can click the Invest button to create orders to invest in their custom portfolio.
At present, Portfolio Builder is only available to individual investors. This tool is being rolled out over the next several weeks and may not yet be available in everyone’s account.
To view all of the notes regarding the TWS 954 build, click here.