Arbitrage Pair Trading on gold, but the fees probably will wipe out all the gains
Go short: $Gold Trust Ishares(IAU.US$
Go long: $SPDR Gold ETF(GLD.US$
Reasons for the above strategies
Go long: $SPDR Gold ETF(GLD.US$
Reasons for the above strategies
When finding the perfect pair trade, the best assets pair should have a correlation of 1 or -1. This will allow us to create arbitrage opportunity by taking advantage of the mispricing by the market.
So I picked 2 gold ETF. Both of them by right should be moving at the same rate. Which they are most of the time as seen in the comparison chart below.
![Arbitrage Pair Trading on gold, but the fees probably will wipe out all the gains](https://sgsnsimg.moomoo.com/feed_image/101592816/c08b27437dc53b628eabec3e1059294a.jpg/bigmoo)
![Arbitrage Pair Trading on gold, but the fees probably will wipe out all the gains](https://sgsnsimg.moomoo.com/feed_image/101592816/6ff82a38c39a3af79022edcee39e67ce.jpg/bigmoo)
however, we can also see that $Gold Trust Ishares(IAU.US$ had recently been above $SPDR Gold ETF(GLD.US$ which means that there is some opportunity for pair trading. As this gap should close over time. So shorting IAU and Longing GLD will be a smart move.
However, as the gap is so small, after accounting for fees. This probably won't be a profitable trade ![]()
![]()
![]()
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
Gong Xi Fuck Cai ❤ :![](https://emoticon.futunn.com/rich_big_face3_mm/58.png)