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i just looked at the PM chart.. you can pull it up yourself, i think if the market sell off continues.. this should break below the ~80 support..

i will buy this put spread and my trade will profit below 84.5 and show make max 4.5x profit at 82.5.


85/82.5 put spread.. August
 
your spread trade might work on a relative basis.. but i think PM will go lower.

i like the 85/82.5 jul put spread for a max profit of 330%.. i think it will go to 80, but 82.5 is a good exit.

HRYdhCz.jpg
 
Quote from OTCkrak:

your spread trade might work on a relative basis.. but i think PM will go lower.

i like the 85/82.5 jul put spread for a max profit of 330%.. i think it will go to 80, but 82.5 is a good exit.
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Thanks for the input krak, and good luck ! Wasn't the down market you are looking for today, but it is volatile enough it can come your way.

My play is agnostic on direction whereas yours is dependent direction. That is why you make the bigger bucks and deserve it with more risk, but with good analysis and your play working successfully you will be fine. Then the beer is on you.
 
Quote from deucy28:

APA Short
DVN Long

Chart 2

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=3832919>
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is correlation important? I mean these pairs are not well correlated
 
Quote from koolaid:

is correlation important? I mean these pairs are not well correlated
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koolaid.........Look well at these charts and longer term ones of the same pair, and re-assess your opinion of their correlation.
 
Quote from deucy28:

koolaid.........Look well at these charts and longer term ones of the same pair, and re-assess your opinion of their correlation.
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They look correlated...but the algorithm from ToS tells otherwise...maybe their formula is off or I'm seeing things that are not there.
 
Quote from koolaid:

They look correlated...but the algorithm from ToS tells otherwise...maybe their formula is off or I'm seeing things that are not there.
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koolaid..........I think you may get some insight from this subject and as a bonus, insight into the happy style of trading behind these charts at the following link. Correlation is nice, but not the same biggy to me as it is to other pair traders.

I prefer to have discussions at the other thread, Pair Trading Strategy Journal.

http://www.elitetrader.com/vb/showthread.php?s=&postid=3832988#post3832988
 
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