Summary: Pairs trading can give us more opportunity to put trades on. In an IRA, this can be difficult given the constraints. In this segment, we consider different ways to get long SPY and short DIA. One option is to get long stock in SPY and synthetically short DIA. The short stock can be done by selling an ATM DIA call, buying an ATM DIA put, and buying a far OTM DIA Call. Another option is to sell a put in SPY, selling a call in DIA, and then buy 5 cents wings on both options. The last option is to sell a put spread in SPY and a call Spread in DIA. All of these trades give different risk, POP, and payoff. Watch this segment of "Strategies In Your IRA" as Tom and Tony weigh the pros and cons of each of these pairs trading strategies.
