pairs trades?

any one doing it?

what vehicles?

indexes or stocks?

best of breed vs weakest?

pros cons..

tia

 

I have made some pair trades.

Long GS (Goldman Sachs), short CFC (Countrywide)
Long XON (Exxon), short TOL (Toll bros)

I only make pair trades seldom, pair trading is done when you're not sure of future movement of the indexes.

IMO pair trading yields modest profits (perhaps I was a bit late), but in times where there's uncertainty, so directional trades are almost sure of having losses (getting whipsawed), regardless if you're bullish or bearish.

I would say that you should start pair trading with SECTOR ETFs, before getting into individual stocks.

 

By the way, why is this thread on options?
Pair trading is usually done with stocks, not with options.

 

thanks for the reply,

yes these would be option trades.

 

ex: atm put on uso

atm call tso

 

Why?