Statistical arbitrage traders trade this one;
Of course what we are really looking at is inflation. The loss of purchasing power of the US dollar via commodities, in this case oil, and the alternate currency, Gold, pricing this also to the US dollar.
February 20, 2008 at 1:33 am
Duc, how would one convert to equal units GLD and USD to arb this?
February 20, 2008 at 1:59 am
Wood,
It’s a “statistical arbitrage” or pairs trade.
The coefficient is historical, not a derivative, thus arbitrage is somewhat of a misnomer.
However, statistical arbitrage has existed and thrived since the 1900’s, so you can certainly make money.
jog