LD Lossdog Research
strategy

pairs trade

4 matching records.

Trade idea

ES pairs trade

The speaker suggests that a pairs trade could be executed by going long on ES and short on oil, based on the current inverse correlation between the two assets. However, the speaker also notes that the trade could be simplified by either going long ES or short oil, as they are inversely correlated. The trade should be kept small due to the potential risks involved.

View full notes
Strategypairs trade
Assetindex
Time horizonshort-term
Entry / triggerES is cheap and oil is expensive
Target / exitES and oil move inversely
Invalidation / stopIf ES and oil are not inversely correlated
SpeakerRon
Risks
  • Market volatility
  • Inverse correlation may break
  • Regulatory scrutiny
longindexlongpairs tradeESshort-term
medium confidenceVerify in video at 28:58 ↗
Trade idea

CL pairs trade

The speaker suggests that while crude oil and gold may show divergence, they are not a classic pair with high correlation. Therefore, a pairs trade between CL and GC is not recommended as a reliable hedge. However, if a trader chooses to proceed, they should focus on micro-level trades and be aware of the low correlation and potential for divergence.

View full notes
Strategypairs trade
Assetcommodity
Time horizonshort-term
Entry / triggerCrude oil near recent highs
Target / exitGold near recent lows
Invalidation / stopHigh correlation between crude oil and gold is required for the trade to be effective
SpeakerScott
Risks
  • Low correlation between assets
  • Market volatility
  • Potential for divergence
shortcommodityshortpairs tradeCLshort-term
medium confidenceVerify in video at 47:40 ↗
Trade idea

MNQ pairs trade

A pairs trade is executed by selling one MNQ and buying two M2K. This trade is based on the relative weakness of the Russell compared to the MNQ. The trade is considered risky but offers an 80% reduction in risk. The trade is an example of basis arb or basis trade.

View full notes
Strategypairs trade
Assetfutures
Time horizonshort-term
Entry / triggerMNQ is up 160, Russell is weak compared to MNQ
Target / exit80% reduction in risk
Invalidation / stopMarket conditions change significantly
SpeakerDog ate AI
Risks
  • Market volatility
  • Change in relative performance of the indices
sellfuturespairs tradeMNQshort-term
high confidenceVerify in video at 18:34 ↗
Trade idea

2-year vs 10-year futures yield curve trade

The speaker suggests a 4:1 ratio of 2-year to 10-year futures contracts as a yield curve trade. This strategy involves using futures contracts to capitalize on the spread between the two instruments. The speaker mentions that the capital required is around $6,000, and the trade is considered low-risk due to the leverage provided by futures. The trade is based on the expectation of a change in the yield curve, and the risk is managed by keeping the position small and using a 4:1 ratio.

View full notes
Strategyyield curve trade
Assetfutures
Time horizonShort-term, with a focus on immediate risk
Entry / triggerWhen the yield curve is expected to flatten or invert
Target / exitProfit from the spread between the 2-year and 10-year futures
Invalidation / stopIf the yield curve moves against the trade, leading to a loss
SpeakerSpeaker
Risks
  • Market volatility
  • Leverage risk
  • Incorrect yield curve prediction
pairs tradefuturespairs tradeyield curve trade
high confidenceVerify in video at 28:00 ↗