Hey guys,
I'd like to make a pairs trade on two stocks A (long) and B (short) using long calls/puts, respectively. The most basic way I know how to do this is buy buying the same dollar amount of both options. So for example, 1000USD of long calls on A and 1000USD of long puts on B. Both slightly OTM and with the same expiration date.
Is this the right way to achieve my goal? Just want a sanity check since this will be my first time putting on a trade like this. Also, Charles Swab doesn't allow me to put on a strangle using two different instruments, so I just bought both option legs separately. Please let me know if that's not the best way. I'm still scaling into my position so there's plenty of time to tweak it. These are leaps.