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Splash Into FuturesPairs Trades Misconceptions | Aug 23, 2022
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    Splash Into FuturesPairs Trades MisconceptionsAug 23, 2022
    When we trade pairs on the show, our two goals are the following:
    * Trade the relationship between the two products (the basis).
    * Reduce risk on a notional-equivalent basis relative to trading one product with the same notional.

    A key concept to grasp is the relationship between risk of pairs trades and correlation between the pairs is inversely related. The more positive the correlation, the lower the risk between the trade assuming one side is long and the other is short.

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