i’m up 12% on my ebay amzn paired trade

despite a warning from a google insider that amazon is just as weak as ebay and i should short both, my paired trade has gone well so far. up a combined 10%. both started at $33 a share and now amzn is at $36 and ebay is at $30.

i’m not really sure how you track a return on a paired trade. it seems like i have not created new dollar exposure since i sold short the same amount i purchased long. anyone know how you calculated returns on this type of trade?

3 thoughts on “i’m up 12% on my ebay amzn paired trade

  1. Mark,
    Maybe I am simplyfing this, but can’t you just calculate the return independently of each other and take the value against your original cash position to get the overall return?

  2. great post.
    i love it when you post about your trades.
    well done so far.
    i think the way to measure the return when you are not out of pocket any cash is to look at the amount of collateral you would need to put up to do this trade if you had nothing else in your account and use that as your “basis” on the trade.

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