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| Name | Pair Options Trading Cointegration Strategy |
| Video Uploader | Video From Forex Day Trade |
| Upload Date | This Video Uploaded At 18-03-2014 07:38:15 |
| Video Discription | The Pair Options are constructed of pairs of stocks that have a high positive correlation between them, meaning that both stocks historically tend to move together. Why do pairs have high correlation? Generally because they are from the same industry sector and traded in the same market, so the same factors impact them. Based on the history of correlation between the stocks, it is assumed that when the correlation between the stocks is temporarily weakened, i.e. one stock moves up and the other stocks moves down, the "gap" between the stocks will close and they will eventually return to their correlated path. The strategy is therefore to identify when the "gap" is created and to trade in the assumption that there is a high probability the gap will close or narrow. |
| Category | Education |
| Tags | Option | Trading | Stocks | Analysis | Market | Forex | Options Strategies (Consumer Product) | Strategy (Award Discipline) |
