David Einhorn may be trapped in a terrible paired trade (TSLA, AAPL, GM)

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May 8, 2017 2:01 PM

Picking the wrong long and the wrong short can be rough, as Greenlight Capital's David Einhorn is now learning with General Motors and Tesla.

The agony of defeat.

A paired trade — long one asset, short another — can, with the addition of leverage, yield market-busting returns.

My introduction to this concept was through

were one of the nutty hedge fund guys, I would go short Apple, long natural gas, and leverage it 100x."

Gundlach never undertook this trade, but the financial world kept track of it, and as it turns out, it paid off big time. "

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