Pairs trade
trading strategy
A pairs trade is a type of stock market trade. It is a spread trade where one asset is shorted and another asset is bought. If the spread between the two assets changes, the trade is profitable or at a loss. This depends on the direction of the change.[1]
Examples change
- A Debit/Credit Spread, short-selling a put/call, whilst buying an option of the same type.
- A stock pairs trade that short sells Mastercard shares while buying Visa shares. [1]
References change
- ↑ 1.0 1.1 "What Is a Pairs Trade?". Investopedia. Retrieved 2022-04-20.