Two Gold Related Long/Short Pair Trades For 2012
Pair trading is a trading strategy based on the concepts of statistical arbitrage and convergence. Typically it involves being long one security and short another. For example one may believe that Apple would outperform Microsoft, so one buys Apple and shorts Microsoft. A pair trade may also involve two trading two markets that usually move close together but have drifted apart, for example the US and UK stock markets. If the FTSE has rallied strongly when the S&P has not, the trader may decide to short the FTSE and buy the S&P, taking the view than the US stock market will catch up to the performance of the UK stock market. Whilst our primary focus is on trading options, we have identified what we believe are two attractive pair trades for 2012.
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2012, Gold, Long/Short, Pair, Related, Trades
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