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Relationship Trading

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Basis Trading
A form of arbitrage in which one buys an investment vehicle while selling or selling short a similar investment vehicle. For example, one may buy a stock while selling a futures contract on the same stock. Alternatively, one may buy a put while selling a put on the same underlying asset for a different strike price. Basis trading is advantageous when the trader believes there is priceinefficiency between the two investment vehicles such that the gain on one will offset the loss on the other. For instance, in the futures contract example, basis trading can be advantageous if the price of the stock plus the cost of carry is less than the price of the futures contract that the investor sells. It is also called relationship trading.

relationship trading


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Relationship trading tip – in my opinion, & trading style: That being said, gold stocks have been advancing at a very fast rate, out performing the price of gold bullion, which is bullish for gold.
I combine multiple time frames, trend lines, momentum, commitment of traders (COT) and several other inter-market relationship trading vehicles.
 
 
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