Pairs trade

A pairs trade is a spread trade, where one asset is shorted, while another is bought. If the spread between the two assets widens, the trade is profitable or at a loss, depending on the direction.[1]

Examples
  • A Calendar Spread, shorting the March oil futures, while having a long position in the May oil futures.[2]
  • A Debit/Credit Spread, short-selling a put/call, whilst buying an option of the same type.
  • A stock pairs trade, shorting Mastercard shares, while buying Visa shares. [1]

References
  1. "What Is a Pairs Trade?". Investopedia. Retrieved 2022-04-20.
  2. "Calendar Spreads". CME Group.{{cite web}}: CS1 maint: url-status (link)
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