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Thank you all for responding on this Survey. So far I have 12 answers
for question A and 12 for B. Comments and results are interesting, and I
will publish the first stats on Sunday, and some comments later, as this
should logically create a discussion thread... Plan is also to conduct
the same survey later on other lists (to which you won't need to
respond) to see how "Realtaders" differ from others if so.
The more you respond to this survey the more interesting the results
will be, so please don't hesitate.
I guarantee any responses and comments will remain strictly private and
anonymous. Also, I will not engage in any critique or judgements
thereafter. All I am interested in, is the study of peoples choices.
Just send one message back with option1 or 2, and another message with
option3 or 4.
Just to reiterate questions:
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QUESTION A:
You regularly trade options, by shorting puts in stocks you have defined
as being trending up. You trade ten stocks for every quarterly expiry,
and your average trade is about $1200 in profits. You are currently in a
short put options trade in a stock you believe in, however, due to an
unexpected crisis at a competitor, your position has been hurt, you are
losing $3500 at the moment.
You are facing the following alternative, which one do you chose?
Option1: Take immediate loss of $3500, and wait for expiry to move on to
next stock.
Option2: Manage the position, by rolling it to the next expiry (and
forego the possibility to trade another stock that meets criteria),
knowing you have 40% chances to end up losing only $1900 in three months
(ie recoup $1600), and that if it doesn't work out still, you'll be down
$4500, (at which point you might still roll your position to the next
expiry)
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QUESTION B:
You regularly trade futures, by entering on breakouts in what you
define as being the direction of the trend. When trades prove profitable
you pyramid systematically, effectively doubling initial size.
You trade 50 times a year on average, and your average trade is about
$4.200 in profits. You are currently in a short trade in yen, sitting on
6 pyramided contracts with over $14.000 in unrealized profits at
yesterday's close.
However it appears the BOJ and the Fed could lead a joint action to
reverse course
and this is currently the main topic among currency traders. .
You are facing the following alternative, which one do you chose?
Option3: Take immediate profit of $14.000, and wait for next setup to
happen.
Option4: Hang on to the position, knowing you have 25% chances the
intervention does take place and the market shoots up to reduce your
profits down to $6.000 only. If they don't, you will collect $6.000
more in profits.
PLEASE ANSWER BACK WITH YOUR CHOICES
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