Ask The Fool
The long and short of brace trades
Q: What’s a “pair buy and sell”?
A: It’s the practice of making two akin trades at the same time.
One is a “long” position (i.e., buying a stock with the expectation that it will increase in value) and the other a “concise” position (where you borrow and sell a reserve you expect will fall, planning to buy it posterior portion later at a lower price).
The two securities will have a strong relation to each other.
For illustration, when the price of oil recently began falling, some people expected gold to rise.
If such, they may accept done some pair trading, buying gold-related securities and shorting oil-related ones.
My smartest investment
Didn’t hang up on this valuable phone invoke
Dear Fool: Years ago I bought 400 shares of Telefonos de Mexico for $1 per share on the approval of John Templeton.
It was soon worth less than a ten cents for part and wasn’t worth selling, with equal reason I hung on.
Original text: http://seattletimes.nwsource.com/html/businesstechnology/2008565149_motley28.html?syndication=rss
