Gaming a Pairs Play
In investing, creating pairs is called "pair trading," and this strategy is the most exciting during earnings season, given the probability of large pops and drops as the market does its best to interpret the next few years of earnings from a single trading session. In addition, when the underlying fundamentals of the broad market appear poised to shift -- as they appear now -- knowing which names to pair up to go long or short is a useful tool. Don't forget, successful pair trading could mean looking at two companies that are due to report earnings on a given day and deciding to make a bet on one, but avoid the other.
First, below is some information about the broader market to lay the groundwork for my pairs play....451 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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