While I was searching the net for any commentary on Pairs Trading, I came across this article in the Business Day section of Fairfax Media...
Here are some of the key points:
"The logic of pairs trading is to make money on the price difference or spread between any instruments"
"The strategy known as pairs trading has the potential to increase returns without being dependent on the direct of the market"
"Dividends and interest paid and received throughout the trade but don't really amount to much. On one side of the ledger you pay interest and are entitled to dividends. On the other you receive interest on your short sale but pay dividends. If trading through a CFD provider, this is all handled seamlessly"
This article gives a quick run down of what Pairs Trading is all about, however if investors need to do research, analysis and enter/exit positions and risk manage their account. Who has the time to do all this?
No comments:
Post a Comment