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Hi Ara,
Sunday, April 20, 2003, 11:50:29 AM, you wrote:
AK> I tried playing DIA / SPY pair... which worked OK in just a short
AK> time frame (days / weeks), but the % return seems limited.
AK> Example: 100 shares DIA = $8,000 ......... 100 shares SPY =
AK> $8,500 (approximately). Total capital tied up $16.5K (or $8.25K
AK> on margin)
AK> The % return is the differential price movment ... so relative to
AK> individual issue price movements it reduces your take (and risk)
AK> significantly, especially when you consider paying (at least
AK> tying up your money) for 2 items.
You have to tie up capital for both, and commissions are charged on
both.
AK> In short, what kind of % return (of your tied up capital) are you
AK> getting to keep you happy and roughly how long is a typical
AK> trade?
AK> Have a great day
Last one I did was short 40,000 Nikko (8603 JP) at about 520 and long
40,000 Daiwa (8601 JP) at about 530, in late October. So, that tied
up about 400,000 basis US dollar, and I closed the position in early
Feb for about US 70K net after everything. I left about 25K on the
table, but now the trade is about 20K less than when I got out.
Best,
Yuki
mailto:yukitaga@xxxxxxxxxxxxx
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