Can you be long and short at same time?

[Hakuna Matata]

Same amounts is 1 mini for example right ? then you trade 1 mini GBP/USD long , and short 1 mini EUR/USD , still have exposure to the USD .

No, same amounts means they are all valued the same. We're talking at crossed purposes mate - what you're saying is don't assume that 10,000 ABC is the same amount as 10,000 XYZ

 

[tar]

No, same amounts means they are all valued the same. We're talking at crossed purposes mate - what you're saying is don't assume that 10,000 ABC is the same amount as 10,000 XYZ

In forex the amount is referred to the primary currency ( on the left = GBP and EUR ) not the secondary currency ( on the right = USD ) . But i get your point you mean same dollar amount , but forex is not traded like that ....

 

[Atilla]

Right, because you’ve been here since 2006 and have racked up over 8,000 posts I’m not gonna go easy on you either.

I don’t see why butterflys are relevant here, because you are not trading fungible instruments – you can’t replace a December future with a March future, or a 99 strike with a 101 strike. Not fungible.

Futures Fly – involves trading futures on the same underlying with different expiries, in the ratio +1:-2:+1. In this trade, you are speculating that, for whatever reason, the middle contract will over/under perform against the other two – for example, someone has bought the sh!t out of December ’14, and because of the volume/liquidity imbalance it’s got out of line with September 13 and March 14. Or, say, you are speculating when monetary policy changes will happen, and commentary from a member of the FOMC changes your opinion.

Options fly – involves options on the same underlying, with the same expiry, but with different strikes, again in the ratio +1:-2:+1. Here, you are speculating that the price of hedging the options will be less/more than the market expects, for example by underestimating volatility. I’ll leave that alone, there is another thread where this is mentioned (or search for Howard Cohodas’ thread where people far smarter than me explain it fully).

Now, moving on to the examples you give (lol)...

JESUS CHRIST!!



Yes, you can, and you are making the relative value trade that one will outperform the other.



So you are selling Gold, receiving USD, and exchanging them for AUD. In this case, you are speculating that the AUD against the USD will appreciate faster than the Gold does. Why you might want to do this I will leave aside.



Here you are doing the following: Buying EUR, Selling USD, Selling GBP, Buying USD. Assuming you do the trades at the same time and in the same amounts, your net position is then Long EUR, Short GBP, and you have no USD exposure. You have just legged in to a long EUR/GBP trade. If you don’t understand any of what I have said, after 6 years and 8k+ posts, I’d just give up. In face you should probably give up anyway, because it’s elementary stuff and you should understand it intuitively.

Do you;

1. Accept - for what ever reason trading two shorts and one long is a valid trading system; or

2. Reject - as a daft idea?


Re the other stuff - there are many systems where pairs of related instruments move against each other as the markets over react the movements are often skewed off longer term ratios and one can trade multiple paired instruments against each other with greater probability and reduced risk exposure to further market movement.

Many bank risk control systems monitor exposure to instruments and market moves that limit or prevent additional purchase with auto trade vetters. Agree this is at entity level but never the less it emphasizes the point and principal is the same. Same entity will have opposing trades in same instrument.


Perhaps I am spouting more rubbish. Here LV have a luagh at this...
HAHAHA Hippo Poops EVERYWHERE! - YouTube




Just for my benefit whilst I agree with your appreciation of my previous post but fail to understand;

1. What has 6 years and 8000 posts got to do with the price of cheese?

2. Is it the 6 years or the 8000 posts you have a problem with?

3. As you are so well informed - what is the 'correct' years or the number of posts; for you to consider the argument or opinion a valid one?



Thanks

 

[Hakuna Matata]

Do you;

1. Accept - for what ever reason trading two shorts and one long is a valid trading system; or

2. Reject - as a daft idea?

Long and short what?

Re the other stuff - there are many systems where pairs of related instruments move against each other as the markets over react the movements are often skewed off longer term ratios and one can trade multiple paired instruments against each other with greater probability and reduced risk exposure to further market movement.

Stat arb. Sure.

Many bank risk control systems monitor exposure to instruments and market moves that limit or prevent additional purchase with auto trade vetters. Agree this is at entity level but never the less it emphasizes the point and principal is the same. Same entity will have opposing trades in same instrument.

Just for my benefit whilst I agree with your appreciation of my previous post but fail to understand;

1. What has 6 years and 8000 posts got to do with the price of cheese?

2. Is it the 6 years or the 8000 posts you have a problem with?

3. As you are so well informed - what is the 'correct' years or the number of posts; for you to consider the argument or opinion a valid one?



Thanks

The point I am making is that after so long you should really have this stuff covered by now.

 

[Atilla]

Long and short what?

For example being long in short-dated 2Y SCHATZ and long-dated 10Y BUND whilst at the same time being short on a 5Y BOBL bonds.

Basically, it is taking a weighted combination of short and long term to off-set against the medium term bond.

 

[Shakone]

I think some people are arguing different things here.

The original argument was about being long and short the SAME instrument. That same part is key. Two options with different strikes are separate instruments, despite them having the same underlying. Connected, sure, but the same, no. Bobl, schatz, bund, gold, silver etc. separate instruments. Trading long one and short the other, well there's nothing wrong with that. Trading long EURUSD and short EURUSD at the same time is a different thing.

 

[Atilla]

I think some people are arguing different things here.

The original argument was about being long and short the SAME instrument. That same part is key. Two options with different strikes are separate instruments, despite them having the same underlying. Connected, sure, but the same, no. Bobl, schatz, bund, gold, silver etc. separate instruments. Trading long one and short the other, well there's nothing wrong with that. Trading long EURUSD and short EURUSD at the same time is a different thing.

Effectively these are same instrument but with different time frames.

 

[bustech]

Atilla

No one is talking about spread trading or closing part of a position.

This is the issue:
Same instrument.
Same size.
Opposing direction.
Equals flat (extra comms, no point).



Arguing anything else and getting annoyed by that says more about
the d1ck headed crap you often spout

This was the original question.
http://www.trade2win.com/boards/dis...can-you-long-short-same-time.html#post2119458

Not hard if you actually read the thread...

Hi LV

Would there be some point in the trade's merit, if the trader made money on both side's of the trade.
Admit could also could loose money on both side's.

 

[Liquid validity]

Hi LV

Would there be some point in the trade's merit, if the trader made money on both side's of the trade.
Admit could also could loose money on both side's.

I can see what you are thinking, but I would still say no.
I'll illustrate with an example.

Say you are short 100k in EURUSD.
The trade is in profit by $450 - 45 points.
A pullback occurs, you leave the short open, and go long 100k.

The pullback ends with a $120 profit on the long.
Your short is now in profit by $330.
To keep the example simple, its closed there.

Both trades profit, $330 and $120 which is $450.
In other words no different than just closing the short
when the pullback started.

What isn't factored into that is the extra spread paid on the long trade.
Do this enough and those costs add up big time.
By being long & short you've still made $450, but its taken 2 trades,
instead of 1, which means the costs (spreads and commission) are doubled.

If you opened a 50k long instead, you are essentially closing half of your short
position, reducing risk in the face of a pullback.
Nothing wrong with that if it works for you.

 

[timsk]

HM,

Of course you are entitled to your opinion. However, that does not change the fact that what you have said is just wrong. Wrong wrong wrong wrong wrong.

You've quoted my entire post in which I covered a variety of issues - some of which are central to T2W Site Guidelines. On that basis, your accusation that my post is “wrong, wrong, wrong” is a meaningless non-sequitur.

As for censorship, let me say this: had your post been written by someone new to the forum, I would have (or, more lkely, someone else would have) explained the flaws in the thought process, and hopefully the OP would understand where they were getting themselves confused. On the other hand, when someone who has been here 10+ years posts it, they shouldn't expect to be treated with kid gloves. Moreover, when someone who is responsible for managing the content of the site produces such bile, they should expect to get a bit of stick for it.

I don't expect to be treated with kid gloves, but I do expect to be treated with common courtesy and respect. If you don't feel you can do that, kindly refrain from posting. As you will see if you read through the thread, there are a number of long standing members and/or traders with considerable experience who are willing to entertain the idea of being long and short the same instrument at the same time. One in particular claims that it is central to his methodology and that he’s a profitable trader. You’re not one of them: I get that and that’s fine.

Time and time again I have run into issues here where interesting content is stifled by mods or admin because it goes over their heads, or threads die off because lulz are suffocated. Here we have a situation where material is being produced by said mods/admin that is de facto crap - why don't you censor that?!

An absolutely extraordinary comment. It’s akin to Hitler accusing Anne Frank of being anti-Semitic. I don’t know what you mean by ‘material’ but, if you’re referring to the posts I’ve made to this thread, all I have ever said is that I'm open minded to the idea of being long and short simultaneously and I'm experimenting with it on a demo account. That you and a few others find that so reprehensible coming from someone with my experience is very much your problem and not mine. Don't know how I can help you with that, sorry.

If anyone has anything new to bring to the thread topic - I'm happy to continue to participate in the discussion. Otherwise, 'I'm out'.
Tim.

 

[cablemonster]

Effectively these are same instrument but with different time frames.

What the hell? This is just plain wrong. Yeah trading a note is effectively the same as trading a bond wtf. No point trading the NOB spread then. I have to side with hakuna here these are very basic points.

 

[the hare]

An absolutely extraordinary comment. It’s akin to Hitler accusing Anne Frank of being anti-Semitic.

Tim.

Since you brought up our national socialist friend, and his secret nazi box (of which Guy informs me there are only 89 left) I will make the following point

Hitlers views where supported by tens of millions of people, but that did not necessarily make him right. Just because your views are supported by t2w members doesn't make you right either.

If by some bizarre streak of good fortune you are able to develop a method based on going long and short the same instrument simultaneously then feel free to give me a call, because I can absolutely guarantee that I can most likely double your profits, and I'd be more than happy to fund you to whatever level you desire, because if anyone has an edge of such magnitude that it can overcome DOUBLE the spread, they are a feckin genius and the world will be theirs to command.

Any position you synthesize from multiple trades I can achieve from a single trade, and my transaction costs will be significantly lower, its that simple really
I won't hold my breath waiting

 

[Atilla]

 

[counter_violent]

If by some bizarre streak of good fortune you are able to develop a method based on going long and short the same instrument simultaneously then feel free to give me a call, because I can absolutely guarantee that I can most likely double your profits, and I'd be more than happy to fund you to whatever level you desire, because if anyone has an edge of such magnitude that it can overcome DOUBLE the spread, they are a feckin genius and the world will be theirs to command./QUOTE]

Ahha...rumbled...your going to go short and long at the same time hence double the profits.

 

[Hakuna Matata]

Effectively these are same .

FML.

Mate, next time you wanna trade "the same instrument but with different time frames", gimme a buzz, yeah?

US is best for me, but I'll do euro, sterling, yen, even aussie if you've got the size.

:clap:

 

[Liquid validity]

This thread is turning into a classic

 

[Atilla]

Yes it is...

Thanks

 

[Shakone]

Effectively these are same instrument but with different time frames.

If they are the same instrument, then they should have the same price, right?

 

[Atilla]

If they are the same instrument, then they should have the same price, right?

Risk and yield varies with different time frames...

However, the two short and one long trades for the three bonds are entered at the same time for the butterfly trade.

Basically, the yield curve behaves differently for the short, medium and long term bonds. When I say they are essentially the same instrument they are German government bonds with different maturity.

Sorry didn't mean to be stating the obvious.

 

[Liquid validity]

Risk and yield varies with different time frames...

Did you get a flight school discount from H Cojones?