Overview:

describe your hypotheses and trades in detail?;

Futures and exchange-traded options are widely available for the following asset classes:

Equities

Energy

For each of these asset classes, please develop a well-reasoned hypothesis regarding the relative performance of two assets within the asset class. A relative performance trade (otherwise known as a pairs trade) does not require you to identify whether a given security will increase or decrease or value. Instead, it requires the following:

1. Identify two assets within the asset class.

2. Identify which of the two assets you believe will outperform the other asset.

3. Long the asset that you believe will outperform and short the asset that you believe will underperform.

Relative performance trade example

Here is an example of a relative performance trade.

Imagine you are forming a relative performance hypothesis related to the following two stocks in the apparel stores industry:

Gap, Inc.

TJX Companies

You do not know whether the overall stock market will increase in value or decrease in value in the future. But you do believe that whether markets increase or decrease in value, GAP, Inc. will outperform TJX Companies. Therefore, you should long Gap, Inc. and short TJX Companies. If you do so:

- If markets increase in value, your long position in Gap, Inc. will increase in value more than your short position in TJX Companies will decrease in value.

- If markets decrease in value, your long position in Gap, Inc. will lose less money than your short position in TJX Companies will earn in value.

For each hypothesis, please develop an exchange-traded derivatives trade that can monetize the view. Hence, derivatives that do not trade on exchanges, such as forwards, credit default swaps, or interest rate swaps, should not be used. Only use derivatives do not use any cash products such as stocks or bonds.

Please assume that you have up to $1,000,000 to allocate to each strategy

Please assume that you will acquire the position sometime during this week June 9, 2018, and will hold it until July 2018