Pairs option trading allows traders to be able to predict on which stock in a specific pair of stocks, will outperform the other within a given time frame. It’s simple. Indicate which stock you think will do better than its mate, set your risk exposure, choose your time frame, choose your pair options type (fixed or floating) and click your entry button on the trading platform.
The information above is just a guide on the process of pair trading. Now that we all have an idea of what pair options trading involves, the next logical question would be on how and where to start. Starting pair options trading has to begin with being able to find a suitable pair options broker.
A good pair option trading broker has to be one that can offer a trade a wide variety of trading pairs for traders to trade on. On any given trading day, a trader will spend a lot of time and energy on stock analysis; he or she does not need to divert some of that energy in just getting around the trading platform and understanding its features. For that reason, a simple, user-friendly interface is most desirable.
These days, traders want a whole lot more from their brokers. It would certainly help to be able to get an online tutorial from the broker’s platform. An opportunity to test a strategy is a must-have for all traders. Therefore, a good broker should be able to offer the option of pairs trading on demo version for traders to rehearse strategies, learn to use the platform, learn how to place trades as well as study the market generally.
It is pretty difficult to find a broker that satisfies all these requirements. But a few have been able to meet the standard in terms of what we have identified above.
In order to help traders get the best out of this very important step in the journey to start trading pair options, www.pairoptions.com has set out to assemble a compendium of resources to assist traders who want to pair trade, start off on a good note. You can even get a pairs trading strategy or two from this website.
Pair options trading is a new concept which has come to stay. Traders can now focus on just trading two stock pair differential performances as a way of making money. No longer do you have to sit in front of financial news TV with your heart in your mouth, wondering how the market performed for the day. A stock pair a day, could bring profits your way.