trader26 I follow portfolio of about 25 pairs. I also slowly change some pairs in my portfolio as learning more and more about pairs trading. Hope to go live (with smaller account) in about 2 months. M.
Mergers & Aquisitions & Takeovers oh my... Do you guys have any strategies for this? In the past couple of months I've gotten clipped by two takeover and sustained huge losses as a result. The latest one was AREX/ME I was long AREX short ME This was the homework I did... Checked all news of possible rumors of takeover prior to... AREX is an $9.00 stock, ME is a $20.00 stock....check AREX had a much lower price to book.....check AREX has about half the maket cap them me.....check and yet ME was aquired by apache. While this is a sound strategy a lot of the anomoly moves comes when there is some news hitting the market (insider trading, news leak) and we unfortunately fade it.
Closed 2 pairs for profit today: AB-OZM for profit 4,96% ALV-JCI for profit 3,37% Opened 2 new pairs: Sold AEM @ 60.87 Bought BVN @ 32.55 Bought RNR @ 57.14 Sold WRB @ 27.09 M.
Busy day Closed 2 others trades XRX -MLHR profit 6.1 % FMX - ABV profit 7.7 % Opened 2 news trades 4k Buy IN @ 13.26 Short ZBRA @ 30.37 6k Buy GG @ 40.34 Short EGO @ 14.03
Dayyyyyyyyyum, son. Brutal. You couldn't have avoided it, though, because it happened overnight. Question for you: if you only held intraday and closed all positions out over night, would these types of events have generally been avoidable?
Yes, it seems most of these announcements happen in the am right before market open... Closing out at the close would have avoided it. That's the thing with pair trading you eat quite frequently like a bird, lots of winner, but everyonce in a while you shit like an elephant, fading a stock that is ripping parobolic. Your not from Chicago are you? I worked with a guy that would say Dayyyyyyum Son all the time.
Bone, Anyways to get access to your forum on the spread professor site? What are some of the things you look for to avoid mergers, aquistions, takeovers? J
Yeah, I'm from Chicago. I probably picked it from a guy who knows a guy who knows a guy who knows your friend.