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Pair Trading Strategy Journal
- Thread starter jonnysharp
- Start date
Mergers & Aquisitions & Takeovers oh my...
Do you guys have any strategies for this? In the past couple of months I've gotten clipped by two takeover and sustained huge losses as a result.
The latest one was AREX/ME
I was long AREX short ME
This was the homework I did...
Checked all news of possible rumors of takeover prior to...
AREX is an $9.00 stock, ME is a $20.00 stock....check
AREX had a much lower price to book.....check
AREX has about half the maket cap them me.....check
and yet ME was aquired by apache.
While this is a sound strategy a lot of the anomoly moves comes when there is some news hitting the market (insider trading, news leak) and we unfortunately fade it.
Do you guys have any strategies for this? In the past couple of months I've gotten clipped by two takeover and sustained huge losses as a result.
The latest one was AREX/ME
I was long AREX short ME
This was the homework I did...
Checked all news of possible rumors of takeover prior to...
AREX is an $9.00 stock, ME is a $20.00 stock....check
AREX had a much lower price to book.....check
AREX has about half the maket cap them me.....check
and yet ME was aquired by apache.
While this is a sound strategy a lot of the anomoly moves comes when there is some news hitting the market (insider trading, news leak) and we unfortunately fade it.
Quote from Darshan:
Mergers & Aquisitions & Takeovers oh my...
Do you guys have any strategies for this? In the past couple of months I've gotten clipped by two takeover and sustained huge losses as a result.
The latest one was AREX/ME
I was long AREX short ME
This was the homework I did...
Checked all news of possible rumors of takeover prior to...
AREX is an $9.00 stock, ME is a $20.00 stock....check
AREX had a much lower price to book.....check
AREX has about half the maket cap them me.....check
and yet ME was aquired by apache.
While this is a sound strategy a lot of the anomoly moves comes when there is some news hitting the market (insider trading, news leak) and we unfortunately fade it.
Dayyyyyyyyyum, son. Brutal. You couldn't have avoided it, though, because it happened overnight.
Question for you: if you only held intraday and closed all positions out over night, would these types of events have generally been avoidable?
Yes, it seems most of these announcements happen in the am right before market open... Closing out at the close would have avoided it.
That's the thing with pair trading you eat quite frequently like a bird, lots of winner, but everyonce in a while you shit like an elephant, fading a stock that is ripping parobolic.
Your not from Chicago are you? I worked with a guy that would say Dayyyyyyum Son all the time.
That's the thing with pair trading you eat quite frequently like a bird, lots of winner, but everyonce in a while you shit like an elephant, fading a stock that is ripping parobolic.
Your not from Chicago are you? I worked with a guy that would say Dayyyyyyum Son all the time.
Quote from garchbrooks:
Dayyyyyyyyyum, son. Brutal. You couldn't have avoided it, though, because it happened overnight.
Question for you: if you only held intraday and closed all positions out over night, would these types of events have generally been avoidable?
Bone,
Anyways to get access to your forum on the spread professor site?
What are some of the things you look for to avoid mergers, aquistions, takeovers?
J
Anyways to get access to your forum on the spread professor site?
What are some of the things you look for to avoid mergers, aquistions, takeovers?
J
Quote from bone:
I just signed two very experienced pairs traders (including a former MS trader) as private individual clients this week, so it might be possible for me to add a bit of color to the thread in the future.
On another note, a proprietary trading firm in New Jersey just took out an exclusive commercial two year license for my gray-box software model.
Again, I am contractually bound not to divulge certain aspects of my methods and modeling specifics, but I will monitor this thread and make targeted contributions where it might add some color to the discussion.
Quote from Darshan:
Yes, it seems most of these announcements happen in the am right before market open... Closing out at the close would have avoided it.
That's the thing with pair trading you eat quite frequently like a bird, lots of winner, but everyonce in a while you shit like an elephant, fading a stock that is ripping parobolic.
Your not from Chicago are you? I worked with a guy that would say Dayyyyyyum Son all the time.
Yeah, I'm from Chicago. I probably picked it from a guy who knows a guy who knows a guy who knows your friend.