Long BIDU, Short GOOG - going to test the longshot. BIDU has a much lower float than GOOG and today is as good as any day for the thesis to play out. Will reverse this trade if price action doesn't play out...
This is probably the riskiest trade ever, because the "correct" thing to do is buy GOOG and sell BIDU.
On a correlated pair like BIDU and GOOG, it's extremely difficult for them to break out of the correlation. There are programs written to trade the pair and maintain the spread. But when it is broken, it can pay off big. I would say I've got less than a 10% chance of this working out, and it may be too obvious and too soon for this to play out today.
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