Ask the Fool The Long and Short of Pairs Trades

Q: What's a "pairs trade"? - R.K., Fairfield, Calif. A: It's the practice of making two related trades at the same time. One is a "long" position (i.e., buying a stock with the expectation that it will increase in value) and the other a "short" position (where you sell a stock you expect will fall, planning to buy it back later at a lower price).

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