Overview of stock pair trading and the pair trading broker, Stockpair. In this detailed stockpair review BinaryOptionsTradingSchool (BOTSchool) opens an account and report what was found out about the stockpair platform and pair options trading.

1. STOCK PAIR TRADING
A brief overview of this exotic investment option

2.  Stock Pair Trading is a simple system where the trader
determines which stock of a pair will perform better.
 Up or Down markets – It makes no difference
returns are based solely on the relative performance
of two assets.
 Returns are based on the divergence of performance
between the pair and run up to 300%
Famous Wall Street Bull In New York, New York
 As you can see in this
example trade these two
assets have diverged
widely and therefore the
payouts are extreme. Very
low return for the asset
that will almost certainly
expire ITM and a very
high payout for the asset
which is more of a “long-
shot” to finish ITM.

3.  This trading structure allows for some amazing risk control
and trading strategies. Especially when employing multiple
pair trades at once.
 There are two main types of pair trades:
 Fixed return options
 Floating return options
 For the fixed options the broker assigns odds as to the
relative performance of two assets at the beginning of a
period and then fixes returns based on those perceived odds.
 For the floating return options the two assets are normalized
and set at equal, 50/50 odds and payouts at the beginning of
the given period and then those returns are allowed to freely
float as the assets begin to diverge in performance.
 It is actually a very simple process while also allowing for
some very sophisticated strategies. Making it great for both
beginners and more advanced traders.
 Lets look at some examples shall we?

4.  This is an example of the
fixed option type from
Stockpair.
 You can see that the
performances were not
normalized at the start of
the period.
 Instead they are
normalized as soon as you
place your trade with the
returns fixed based on past
performance and current
sentiment.
 In this case, 38% return on
an apple play and an 81%
return for a NASDAQ play
 You can simply search
around the various asset
pair looking for the returns
you want.
 Or stick with selected pairs
and take what’s on offer
for their returns.

5.  Here’s an example of the
floating pair options contract.
 In this case you see that these
assets were normalized at the
beginning of the period.
 They and are allowed to float
freely, along with their returns
after that.
 This structure creates a wide
variety of returns available at
any given time and for any
given period.
 A very nice advantage of pair
trading.
 With the floating options,
however, there are only three
time periods to choose from.
 Today
 This Week
 And This Month

6.  Another floating pair
options example.
 This time with the
ebay/amazon stock pair
trade.
 Note the “sentiment” bar at
the bottom of the screen.
 This is the current split
between ebay options
contract buyers and amazon
options contract buyers.
 We frequently will place
trades going against this
sentiment if it gets to
extreme levels.
 Any way you choose to use
it, it is a nice feature to
have.

7.  And one last floating pair trade
example.
 We wanted to include this one
simply to help show the range
of returns available on the wide
variety of underlying assets.
 As you can see these two assets
have tracked very closely over
the time frame of this pair
option.
 As a result, the return rates are
also nearly equal.
 However, look at the sentiment.
It is nearing extreme levels if
not there already.
 Sentiment alone though should
never determine a trade. There
may be a very good reason for
the divergence.
 Do your research before any
trade.

8. Stockpair offers a wonderful resource center for all things related to stock pair trading.

9.  A daily updated
blog with stock
market updates and
analysis, pair
trading tips and
tricks, and much
much more.
 An incredible
selection of stock pair
to choose from.
 This isn’t even all the
A’s!
 Also offers pair
including
commodities and
indices.

10. We had a lot of fun trading pair
options with Stockpair and
trading their platform. You can
check them out here.
Or visit us for more
information on binary options
and pair options, and read our
full Binary Options Reviews.