Can you be long and short at same time?

barjon said:
cable

All I am saying that it is a way of taking your profit and continuing to play the same instrument in a way that you might not do if waiting for your usual set ups (if you play momentum in this way as your normal method you wouldn't bother).
Click to expand...

You do not need to have a position on to "play the same instrument". You can just close one position, be flat, and open another when you feel the moment is right. And it matters not one jot what your strategy or style is, because in the end it comes down to the mechanics of opening and closing trades - and the costs associated with doing so.

barjon said:
I also pair trade ftse/dow trying to exploit the change in the changing relative difference between them. So I will be long ftse and short dow or short ftse and long dow. When it comes time to exit, if the markets are going down I will exit the long trade first and hang on to the short if it keeps going (and cover speedily if it doesn't) - vice versa if the markets are going up. I have merely suggested something similar.
Click to expand...

I've been over this is a previous post. What you're doing is trading the relative value of the FTSE vs. the DOW (I will ignore the point that to do this properly you need to legitimately hedge your exposure to cable). There is nothing wrong with that whatsoever if that is what you mean to speculate on. One is not a proper hedge for the other. These are not fungible intruments.

What you've mentioned in red though is misleading. Effectively you are opening a new position by closing one of the legs, and if that is where you expect the profits of your strategy to come from, you would do better (by reducing your transaction costs) simply by being flat and putting an outright position on in the first place.
 
barjon said:
well, that's the point we disagree on as I've tried to explain.
Click to expand...

When you have a long and a short open at the same time, and you close one to take on a position, you can equivalently (being flat) enter a new trade at that exact same point. That's the same, except you're not committed to having to exit two trades.
 
barjon said:
cable

All I am saying that it is a way of taking your profit and continuing to play the same instrument in a way that you might not do if waiting for your usual set ups (if you play momentum in this way as your normal method you wouldn't bother).

As well as equities I also pair trade ftse/dow trying to exploit the change in the changing relative difference between them. So I will be long ftse and short dow or short ftse and long dow. When it comes time to exit, if the markets are going down I will exit the long trade first and hang on to the short if it keeps going (and cover speedily if it doesn't) - vice versa if the markets are going up. I have merely suggested something similar.
Click to expand...

it's a very bad way of taking profit because you gain NO advantage whatsoever and you open yourself up to losing twice the spread/commission/slippage if you dont 'roll forward the position'.

as you know pair trading / relative value trading / futures spread trading is totally different and is not relevant. A professional spreads trader will use an autospreader to enter and exit positions. If you are manually legging in and out (for whatever reason) then it goes without saying that it is common sense to exit the winning leg after the losing leg. Just the same as you if you were entering a spread manually you should always open the leg going with the expected spread movement first.

I did actually think of a situation where in the past it could work to go long and short at the same time. This was when data breakouts were easier to play (allegedly) and you could just go long and shot 10 seconds prior to the news with a small guaranteed stop. I believe this worked for some in the past although I have never tried it.
 
Shakone said:
Which guidelines did he break?
Click to expand...

he seemed to be suggesting that some of the mods were promoting this 'hedging' thing to benefit brokers. I really don't that is the case although it's use certainly would benefit brokers. Maybe he just had a big weekend on the sauce in Malta. :LOL:
 
cablemonster said:
he seemed to be suggesting that some of the mods were promoting this 'hedging' thing to benefit brokers. I really don't that is the case although it's use certainly would benefit brokers. Maybe he just had a big weekend on the sauce in Malta. :LOL:
Click to expand...

I don't think they are doing it with ulterior motives, it's just that they have confused themselves in to not understanding what they are talking about :rolleyes:
 
Shakone said:
When you have a long and a short open at the same time, and you close one to take on a position, you can equivalently (being flat) enter a new trade at that exact same point. That's the same, except you're not committed to having to exit two trades.
Click to expand...

Yes - but, unless I've got it wrong, the costs are the same as I explained http://www.trade2win.com/boards/dis...-you-long-short-same-time-32.html#post2144680 aside from overnight carry if your period of being flat lasts that long.
 
Hakuna Matata said:
I don't think they are doing it with ulterior motives, it's just that they have confused themselves in to not understanding what they are talking about :rolleyes:
Click to expand...

I could say, equally, that you do not seem to understand what it is I've been talking about if your quelle surprise post is anything to go by :LOL:
 
dont know if this has been covered but on ig index, you can do a trade in both directions by opening a forced open trade.
 
Shakone said:
As I said, there are scenarios where the costs are the same. Scenarios where hedging increases costs, but NO scenario where hedging reduces costs. It's always the same, or worse.
Click to expand...

no, it can't reduce costs but it opens up opportunity in a different way that may, or may not, be beneficial.
 
barjon said:
no, it can't reduce costs but it opens up opportunity in a different way that may, or may not, be beneficial.
Click to expand...

No, it doesn't. That opportunity is equally available when you're flat. You can still get in at any time.

Still want to know why the hare was banned. What rule did he break?
 
barjon said:
no, it can't reduce costs but it opens up opportunity in a different way that may, or may not, be beneficial.
Click to expand...

It does not open up any opportunities that are not already there. How can it "open more opportunities"?? Do you think it will change what the price does?!?!?! You are deluding yourself!
 
Shakone said:
No, it doesn't. That opportunity is equally available when you're flat. You can still get in at any time.

Still want to know why the hare was banned. What rule did he break?
Click to expand...

Blimey, I didn't say it wasn't equally available - I just said a different way. The main difference is that in the hedged way a further trade is somewhat forced upon you since you've got to close something that's open.

ps: see other thread - the lulz one - for hare.
 
You must log in or register to reply here.

Similar threads

newspreadbetter
can you go long and short at same time?
Replies
9
Views
8K
Pferd
P
8
long and short
Replies
1
Views
3K
halldorpb
H
A
Daily Quantitative Trading Ideas And Analysis
22 23 24
Replies
470
Views
37K
AndersenBands
A
N
"Long or Short" please help
Replies
6
Views
2K
frugi
frugi
L
Day trading with long / short positions?
Replies
1
Views
1K
tomorton
T
Top