Learn How to Pairs Trade | How to Do Futures

Jan 27, 2021

By Frank Kaberna


Pairs trading can give you access to unique, diversified opportunities by combining two markets into a single strategy. Pairs can offer a neutral bias on asset classes such as stocks, so that your trade hinges on how two products relate to each other as they move higher or lower. Learn how to pairs trade everything from stocks and bonds to commodities and currencies using futures, shares, and options in our seminar on Pairs Trading, part of our How to Do Futures video series.


0:00 How to Do Futures

0:50 What is Pairs Trading?

2:25 Visualizing a Pairs Trade

3:45 Basic Pairs Trading Example

6:00 3 Pairs Trading Benefits

6:05 Speculate

7:00 Offset Risk

8:15 Diversify

9:40 Choosing the Pair

10:20 Finding Pairs Opportunity

15:35 What is Correlation?

18:40 Simple Pairs Trading Formula

20:25 Advanced Pairs Trading Formula

22:40 Simple Pairs Trading Example

24:30 Advanced Pairs Trading Example

26:00 Trade Ratios

27:10 Pairs Trading Benefits & Opportunities

28:15 Finding Opportunity with Price Action

31:35 Finding Opportunity with Trends

34:00 Finding Opportunity with Economics

36:10 Offsetting Risk with Pairs Trades

39:50 Using the Smalls

41:00 Margin for the Smalls

Looking for More?

The Small Exchange is making markets more accessible to more people with products that mix the efficiency of futures with the simplicity of stocks. The Smalls offer easily adoptable solutions to risk management and speculative needs of the modern trader in markets ranging from stocks and bonds to currencies and commodities.

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