Options Jive

Monday – Friday | 8:40 – 9:00a CT

How Correlations Change

Options Jive

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We often make trades based on historical correlations; these correlations can shift and, as traders, we need to know what implications this may have. Tune in to hear Tom and Tony look at how correlations between common pairs trades has shifted in the past!

Traders use correlations to:

  • Diversify underlyings in their portfolio

  • Diversify strategies in their portfolio

  • Hedge positions with multiple underlyings

  • Pairs trade securities with strong negative or positive correlations

In this segment, we look at historic correlations between common pairs trades such as the S&P 500 and the Russell 2000, the Nasdaq and the Technology sector, Gold and Silver, 20 and 10 Year Treasuries, and lastly Nvidia and AMD.

Be sure to tune in to see Tom and Tony break down how these correlations change in today’s Options Jive!

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