market direction

[redart]

Yes, i think i see how you need to protect yourself against big gaps that would jump through any stops you may have in place.
I guess Im confused as to the difference between hedging with an option, and, for instance, shorting some futures contracts on one account, and hedging it with a smaller long position on another account.
My example at least seems kind of pointless, because you may aswell just trade a smaller position in the first place and leave it at that!
Just to be clear what im confused about, when you 'hedge' aren't you just flat??

 

[scose-no-doubt]

Hey Genicals. Looking at your bubble profile you posted a while ago and oil futures ... good stuff. Might have a blast of the option strat on my demo account and see how it pans out. Options are expensive through CFD broker though.

 

[N Rothschild]

i like this area for selling copper

 

[leovirgo]

Good thread! I want to move on to swing trading without having to work at odd hours. Using options is the way forward and you demonstrate that.

 

[scose-no-doubt]

Anyone else thinking that these option strats are the reaon why the futures and spot tend to bounce off of round numbers?

Psychological level my a*se.

 

[scose-no-doubt]

If anyone who read this thread is even greener than me and is thinking of using a CFD or spreadbetting account to have a go at using Roths protective put strategy (as I was until I sat down to analyse the risk) then don't bother. What I came to realise when my analyses continually showed that downside risk was exceeding the premium paid was that in my excitement, I overlooked the fact that CFDs and S/B gives you absolutely zero entitlement to the underlying instrument thus rendering the strategy useless and giving you unlimited potential losses whether or not you hold to expiry whilst giving you a mega increase in risk. You're basically trading the underlying in one position and then trading the greeks in the other rather than having an overall position. Don't know how to quantify the risk but I know all I need to know lol.

Thank f--k for demo eh.

Anyways happy trading/learning.

 

[N Rothschild]

yes i dont think using syntehtic posistions would work in spreadbetting due to the fact you cant execute in the underlying!

 

[N Rothschild]

although the SP has moved rather offside since my call, i think we are reaching a major turning point here. (famous last words)

infact im so certain, i stake all my credibility that sometimes next week the down move well begin

 

[N Rothschild]

im long crude again from 84 doolahs

 

[leovirgo]

how do you exit in your strat?

 

[N Rothschild]

well when it comes time to exit, sell your futures pos and just let the puts expire worthless..or sell them if they are worthing anything, but probably not

 

[N Rothschild]

shameful plug here for my friends book, but its really good actually..im no options expert, but she is.

http://www.amazon.co.uk/Commodity-O...=sr_1_3?ie=UTF8&s=books&qid=1271424847&sr=8-3

 

[leovirgo]

well when it comes time to exit, sell your futures pos and just let the puts expire worthless..or sell them if they are worthing anything, but probably not

I meant how you exit half way for whatever reason

 

[N Rothschild]

http://www.zerohedge.com/article/breaking-sec-charges-goldman-sachs-fraud-subprime-mortgages

WOW, this is HUGE.

i didnt think that clal for a sell off would happen today!

 

[barryb]

http://www.zerohedge.com/article/breaking-sec-charges-goldman-sachs-fraud-subprime-mortgages

WOW, this is HUGE.

i didnt think that clal for a sell off would happen today!

The so called legendary Paulson turns out to be just another crook then.

 

[MrGecko]

The so called legendary Paulson turns out to be just another crook then.

Well he's not the one being sued, so he's a pretty smart one

 

[N Rothschild]

goodbye goldman!

the down side of this is im taking a total kicking on crude, but this is why we hedge

 

[barryb]

Well he's not the one being sued, so he's a pretty smart one

true. Nice to see Goldman with egg on their face though.

 

[N Rothschild]

although the SP has moved rather offside since my call, i think we are reaching a major turning point here. (famous last words)

infact im so certain, i stake all my credibility that sometimes next week the down move well begin

:whistling

 

[N Rothschild]

check the explosion in put premium