Good work Jay!! I have been thinking of an outright buy of VCGH for about a month now. Perhaps a pair trade is a better than outright straight trade. Best of luck to you and I will keep following your progress Bob
Spread continues to work! rick 21.41 vcgh 4.64 spread start price: 18.12 spread now: 16.77 profit= 1.35 per share if spread narrows to 4.00 profit per share ..offset half
This is probably a noob's question, but how does your chart compare the price of VCGH to RICK @ $22 when VCGH never has reached above the price level of $16?
Why would you pick 2000 shares of each? If you wanted to really trade the spread, you should be much closer to dollar delta neutral. As it is, you're selling $45k notional of one, buy $9.2K notional of the other. You're straight up short 36k stripper dollar deltas.
I picked up 2000 shares of each because that is what I wanted to do.. I nevr mentioned being delta neutral etc.. so to make you happy.. okay a RATIO spread then.. Geeez.. why not look at the trade not the mechanics.. you can trade spreads however you want. i HAVE SEEN A STRIPPER WITH ONE "LEG" SHORTER THAN THE OTHER.. MAYBE IT DIDN'T OCCUR TO YOU THAT I THINK SHORTING rick HAS A HIGHER PROBABILITY OF SUCCESS THAN BUYING VCGH. At this point I ahve actually done better on an ROI basis by shorting more dollars of rick.. I would have lees profit at this point if I had been delta dollar neutral as you call it.
vcgh 4.51 rick 21.65 spread= $ 17.14 Spread initial cost= 18.12 -17.14= .98 cents/share profit at this point
SPREAD AT 18.84 INITIAL 18.12 NOW DOWN ! 72 CENTS PER SHARE!!!!!!!! NOW IS A SPECTACULAR TIME TO PUT ON THIS SPREAD SELL RICK BUY VCGH