Excuse my show of naivete in asking the following two questions as I am somewhat of a beginner at all this: #1.) Is it possible to successfully pairs trade GS/LEH? Is this termed pairs trading or arbitrage trading? It seems to me that each day there will be a point at which each of them diverge in price by about 0.5% then merge in price later in the day - almost always. Isn't is possible then to simply short the higher stock and go long the lower stock until both of them come together in terms of %gain/loss for the day. Can it really be this simple? #2.) Ex-dividend trading. There are numerous NYSE big cap stocks which almost always rise above the ex-dividend price the day after the ex-dividend is distributed. Is it not possible then to consistently buy these stocks the day before distribution and then, after collecting the dividend into your account on distibution date, simply sell the stock after it rises (as it virtually always does) above the price pre-dividend, usually the day after distribution.