hedging YM

[rxis]

Could anyone please post some tips on how the mini-dow can be hedged? I took out my YM short again!

Before March closed I was using June to hedge.

 

[H2O]

I know a lot of people use ES (S&P eMini) as a spread trade with YM.

Note: a spread trade is different than a hedge !!

 

[ERA]

Could anyone please post some tips on how the mini-dow can be hedged? I took out my YM short again!

Before March closed I was using June to hedge.

If you are trading longer term, sell a mini dow call option above the market and use the proceeds to either buy a put or part buy the put below the market, the put giving the stop protection with little cost and a lot more flexibility. Granted you lose the opportunity profit above the call strike if the market should rally..

 

[frugi]

You can hedge 5 lots of mini Dow with 1 of the new big Dow (DD) contract that started trading today, although liquidity may be an issue. Should be interesting to watch the two trade together for a while.