Hubble, Bubble, Toil and Trouble

This is a discussion on Hubble, Bubble, Toil and Trouble within the Indices forums, part of the Markets category; Dow has gone beserk this month compared to S&P and NASDAQ. Trying a pair trade. Short DOW @ 23455 Long ...

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Old Oct 25, 2017, 11:27am   #1
 
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Hubble, Bubble, Toil and Trouble

Dow has gone beserk this month compared to S&P and NASDAQ. Trying a pair trade.

Short DOW @ 23455
Long x 4 NASDAQ @ 6071
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Last edited by barjon; Oct 25, 2017 at 11:35am.
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Old Oct 25, 2017, 11:51am   #2
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Hoping they meet in the middle?
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Old Oct 25, 2017, 12:00pm   #3
 
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Originally Posted by brewski1984 View Post
Hoping they meet in the middle?
Aye, DOW has been trading very strong against NASDAQ so looking for for them to revert to a more normal relationship by NASDAQ trading strong against DOW - doesn't matter if they are going up or down so long as NASDAQ rises more than DOW relatively if the UP continues, or falls less than DOW relatively if they go south.
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Old Oct 25, 2017, 12:11pm   #4
 
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Originally Posted by barjon View Post
Aye, DOW has been trading very strong against NASDAQ so looking for for them to revert to a more normal relationship by NASDAQ trading strong against DOW - doesn't matter if they are going up or down so long as NASDAQ rises more than DOW relatively if the UP continues, or falls less than DOW relatively if they go south.
So this raises the question of when to close the trade, what will you be looking for?
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Old Oct 25, 2017, 12:37pm   #5
 
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So this raises the question of when to close the trade, what will you be looking for?
Yes, there's no natural target to look for - either for gain or loss - so it's just a question of watching how it goes. I check it each hour.
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Old Oct 25, 2017, 12:46pm   #6
 
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barjon started this thread Currently NASDAQ 6068 = -3 @ £4 = - £12
DOW 23436 = + 19 @ £1 = + £19
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Old Oct 25, 2017, 3:25pm   #7
 
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barjon started this thread Currently: NASDAQ 6072 = +1 @ £4 = +£4
DOW 233390 = -65 @£1 = +65

NET+£69
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Old Oct 25, 2017, 8:26pm   #8
 
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Nas 6054, Dow 23334 for net £52 on the basis of £1 Dow, £4 nas.

Bit of a roller coaster while I was out at the circus with granddaughter (so much for checking every hour!). One of the troubles with this sort of trade is that you can’t set a trailing stop or anything like that because it’s the relationship between the two that counts and not the individual prices.
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