A ‘pairs trade’ (also called a spread trade) refers to a strategy where a trader initiates a long and short position simultaneously, usually in related markets, to hedge out certain types of risk. For example, a trader could take a bullish view on gold over silver to mitigate risk of metals (because if all metals fall, theoretically, the trader’s downside is cushioned by their short position against their long).
Here is a spread chart of palladium/platinum, where a rising chart denotes palladium outperforming platinum since February. And if price action on the underlying charts is anything to go by, we could see the ratio continue to rise over the coming week/s.
See today’s video for key technical levels for platinum and palladium, and we also briefly catch up on Tesla (TSLA) after it popped higher by 4% yesterday.
S&P 500: 4,127.99 (-0.81%) 12 March 2021
- 316 (62.57%) stocks advanced and 189 (37.43%) declined
- Consumer Discretionary (0.556%) was the strongest sector and Energy (-0.94%) was the weakest
- 8 out of the 11 sectors outperformed the S&P 500
- 94.26% of stocks closed above their 200-day average
- 95.45% of stocks closed above their 50-day average
- 83.37% of stocks closed above their 20-day average
- + 5.62% - NVIDIA Corp (NVDA.OQ)
- + 3.7% - Conagra Brands Inc (CAG.N)
- + 3.69% - Tesla Inc (TSLA.OQ)
- -5.54% - IPG Photonics Corp (IPGP.OQ)
- -5.29% - Carnival Corp (CCL.N)
- -5.05% - Advanced Micro Devices Inc (AMD.OQ)