Pair Options Trading Benefits

Trading in Pair Options can offer significant benefits to the trader. The following are the key benefits of Pair trading:

Pair Trading is Market Neutral

In Pair Options trading the overall market movement does not affect your trade and your profit only depends on the relative performance of the stocks. If you correctly predict which stock within a stock pair will expire in the money, it does not matter even if the market went down. Pair Trading significantly reduces the market risk and enables you to focus on the stocks and not the markets, which is especially important in today's volatile and unpredictable markets.

Pairs Trading is Simple

Pair Trading has only three parameters to choose from: position, option duration and investment amount. There are only two possible results: "In the money" or "Out of the money". If you are right about the better performing stock, you will receive the predetermined payout. If the other stock in the pair performs better than the one you chose, only the initial deposit on the stock pair will be deducted from your account. Payout amounts are known before you place an order. Once you purchase an option, you will see your position payout in real time.

Both Fixed and Floating Pair Options

In Pair Trading, options come in two distinct "categories": Fixed Pair Options and Floating Pair Options. With Floating Pair Options you can close your position before the option expires and take early profits or stop your loss. Each type of option has a different performance value based on the start time and market conditions. There are 50 pairs to choose from on stock exchanges worldwide.

Pair Trade Choice of Risk Level

Pair Options rate of returns for each stock is correlated with the inherent risk in the position. Therefore, a higher return rate results in a higher payout if your trade expires in the money, but with a higher risk. When you open a Floating option position there will be a higher rate of return for the stock that is out of the money and a lower rate of return for the "leading" stock that is already in the money. If you want to lower your risk you may choose the stock that is in the money. However, if you prefer a higher risk and the chance for a higher return you may pick the stock which is out of the money.

Pair Trading Limited Financial Risk

Trading in Pair Options offers a fixed reward and great choice: risk is always limited and known. For each trade, only the amount you invest in the trade may be deducted from your account if your option expires out of the money. Additionally, you can earn high returns when the markets are lower as well as higher.

No Commissions or Hidden Costs in Pair Trading

Trading Pair Options on the Stockpair platform is absolutely free. In addition, there are no commissions or hidden costs. This enables you to make the most out of your Pair Options trading experience with Stockpair.

Learn more: for further information checkout our examples and Guides. If you are ready to start trading, you can open a Live Trading Account in minutes.

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