|Moderated By: Biomaven -- (Not Moderated) -- Started: 10/5/2004 2:17:17 PM Revision History|
A "Paired Trade" is buying one stock or index and simultaneously shorting another. It is a bet on relative performance rather than absolute performance - you can make money even though both stocks go down, just so long as your shorted stock goes down more than the stock you are long.
Good paired trade opportunities are infrequent, but can be gems when you find them - very low risk for the reward.
This thread is meant to explore opportunities, ideas and strategies involving paired trades. General ideas and discussion on hedging are also welcome.
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