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(Xcel Energy – CMS Energy) We talked about this pair in Monday’s Pairs Webinar, Part II, “When Going Gets Tough, The Tough Trade Pairs” One of the aspects about the pair that I discussed is how tight the consolidation has been lately. The pair used to offer ranges of 0.50+/- above and below the 10 SMA, and now it is offering about 0.30 +/- above and below the mean. This is still a great pair of training wheels, for all of the new pairs traders out there. However instead of using $5,000 per side of the trade, we might want to consider another layer added on for any pull-backs, which will basically make up the difference in the tighter range, and add a few more shares for the trade. Either way, live or paper money, you should become familiar with the excellent recipe of this pair and look to duplicate it with other potential pair trade set-ups.
- Pair: XEL – CMS
- Sector: Energy Industry
- Current Distance from mean: 0.00
- Correlation: 0.98
- Spread Range: 1.30- to 1.50-
“Bees & Pairs”, Utilizing the Underlying, Puts, Calls & Pollinating High Or Low With The Queen, as she makes the “Random Flight Of The Queen Bee”. Get a taste of “JaxsOpts(TM)” Multiple Legs Of Equities Options, I.E. (SPY-IWM, IWM-QQQ, IWM-DIA) all of which bring new trading environments for safety and enjoyment. The “JaxsOpts(TM) trade strategy starts with buying long an anchor option pair, then shorting a second complimentary option pair with a common thread of a lead stock. This is more exciting action, and we have added it to our Bonus Excel Sheet, along with the “QueenBee(TM),”HoneyBee(TM)” & “Bumble Bee(TM)”, all of which are great for discussion and evaluation for our Thursday Pairs Trading Hour Show!
“QueeBee(TM)”Capital Commitment /ES Futures Margin Requirement $5225.(Pending QueenBee(TM)trades quoted as *CPP* Credit Price Position) The February “Weekly” Short Call option is the (./E3CG7C2335), The long Put option is (./E3CG7P2215). The /ES Underlying, may or may not, be entered into long, or short, at the discretion of each individual trader for additional profit potential with more Pairs Trading Set-ups.
“HoneyBee(TM)” Ishares Russel 2000 ETF & SPX 500 “WEEKLY” Call IWM – SPX February 15,$2355C Welcome to our “HoneyBee(TM) Trade strategy. We start with selling regular size short *(12 to 25)* for mid-range instruments, and then buy 1 call, with about a (5 to 10) Delta in order to always protect our short IWM shares. Another Pairs Trading Set-up.
TOS, has us back in business with importing our pairs from our Bonus Excel Sheet & Now We’ve Added More New Features To Trade Our Pairs Using Both The Spread Value & The (PPL) Position Price Level
“Futures Pairs” /ES-/TF Monday 13th, at (9:17 pm) & our pair is about 15.16+ above the mean for our (S&P 500 – Russell) Mini Futures Contracts. “Expected previous consolidations were” 15.0+ to 25.0+ above & 15.0- to 25.0- below, the 20 Day (DM) Distance-from-the-mean, and “will be re-evaluated”. The present 20 SMA is at 919.10. These trades are self directed trades strictly managed by you the individual trader, and “Ninja Pair Trades” are not tracked in our “Pairs Trading Portfolio”…
For any questions, comments, new ideas, or to request your pairs trading starter kit, please email Tom “The Southern Gentleman” Cook at pairstrader@shadowtrader.net.
Tuesday & Holding Steady With Pairs Trading Strategies!
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The commentary above is excerpted from the ShadowTrader Pro Pairs Trader newsletter. The newsletter is a stock only service designed for active equity traders who are interested in pairs trading of equities long and short simultaneously so as to profit from divergences while maintaining a market neutral bias.
The daily report spotlights one equity pair which trades in a definable range and whole stocks are positively correlated. The objective of the newsletter is to present one such pair daily that may be coming into play currently, giving self-directed traders the opportunity to put the pair on watch for possible entry. Additionally, Pairs Trader sends out specific trade recommendations intraday on selected equity pairs. These trades are actively managed via real-time text alerts and are tracked in the Pairs Trader Portfolio.
Specific pairs trade recommendations are posted to MyTrade as we find them. The ideas are always presented as a matched equity pair, alerting subscribers to purchase one stock while simultaneously shorting another, often within the same sector or industry group. Trade alerts clearly explain the analysis behind the setups and also educate newer traders on basic pairs trading concepts such as spread, ratio, correlation, beta/market neutrality, and more. These trades are added to the ShadowTrader Pairs Trader Portfolio which is updated nightly and included in each day’s edition of the Pairs Trader newsletter. The newsletter is sent out each night assuring that users have ample time in the morning to digest the information.<
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