One of the main strategies we emply at POWR Options is called a pairs trade. We look to identify situations whee the much higher rated stock in the POWR Ratings has dramatically underperformed the much lower rated stock. Buy bullish calls on the higher rated name and bearish puts on the lower rated company.
The expecation is that the relative divergence between the two stocks will be begin to converge. This means we expect the better stock to start outperforming the worse stock with the bullish calls performing better than the bearish puts.
