Warning: Following my trades may be hazardous to your financial health. See Disclaimer.

Thursday, May 03, 2012

Follow Up on CMG, PNRA Pair Trade

I've traded the CMG/PNRA pair trade 3 times since I posted the other day.  All three trades were profitable.  CMG and PNRA basically moved in tandem along with the broad market; however, the pair trades proved advantageous because:

  1. The hedging greatly reduced my emotional anxiety, thus prevented me from being shaken out of trade easily.
  2. There were (bound to be) market inefficiencies at times, allowing the pair trades to become temporarily profitable.
So essentially, I was able to hold on to the trades until they become profitable; at such time I'd duly exit the trades.  Nothing is guaranteed, but so far it's worked out nicely.

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