All you want to know but never asked about the stocks and options markets.

martes, 4 de octubre de 2016

Investment Strategies: Spread Trading

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Investing in pairs or spread trading is relatively common in the world of institutional investors, but rare among minor investors, mainly because one of the two legs of the strategy involves a short position. This fact can limit access to retail investors, because they tend to have more difficulty finding a broker that allows them to open a short position on an asset.

In general terms, spread trading is to bet that an asset will perform better than another, regardless of whether the market rises or falls. That is, it is considered a market neutral strategy, because if our forecast is met, it does not matter what the market do.