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Bob Fulks wrote:
> But if you are trading the long SP position in and out several times
> a day, you can leave the portfolio insurance "Put" in place most of
> the time and this allows trading in the high liquidity futures market
> while keeping the low liquidity insurance policy in place.
Yes, indeed. Certainly a legitimate strategy, and, incidentally, one that I
use, too, once in a while. However, when a position is being held overnight
or longer, as was the "case" in your previous post, margin and interest
considerations come into play. For medium to long term trading, synthetic
positions will definitely prove more expensive than their simple
counterparts.
> The point is that it is dangerous to take any gamble that you cannot
> afford to lose, no matter how unlikely. And I am amazed at all the
> people who do it routinely...
Couldn't agree more.
Michael Suesserott
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