|
PureBytes Links
Trading Reference Links
|
Hi Ben,
could you kindly clarify a few points for me?
For one thing, what is the idea behind hedging with puts for a limited time, and then lifting the hedge the moment you can pay for it? A market drop may occur any time, not only when you initiate your position.
Furthermore, 6 emini puts would be a totally inadequate hedge against 20 long emini futures. Perhaps you meant 26 emini puts?
In case you meant 6 big S&P puts, have you checked with your broker re margin risk? I've never mixed big with mini, so I don't know for sure, but the big S&P puts may not be directly redeemable against the eminis. In a crash situation, margin for 20 eminis might grow out of proportion without being counterbalanced by the puts via SPAN. Would be very much interested to know what the SPAN regulations are saying here.
Lastly, what is your time horizon in case the market drops? There is the theta effect (time decay) to consider. The initial 2 points risk will grow much larger the longer this hedge is kept in place.
Thanks and best regards,
Michael Suesserott
Ben wrote:
> We are closer to a low in BOTH NASDAQ and sp500
>
> if 1189 holds and we close substantially above I would be happy
> NASDAQ and sp 500 will probably make a lower low ,
> do not try to buy bottoms
> lets wait for confirm up move
> my trade of long at 1192 will be with hedge buying 20 e mini
> long 6 1190 puts so my risk is only 2 points,
> will sell the puts to a loss on a CLOSE above 1200, and also sell at that
> time 5 e mini(out of the 20)
> Ben
>
>
>
>
> Subject: Re: [RT] sp500 update and the vix
>
>
>
>>Clyde's hurst projections for the vix next week
>>
>>
>>Subject: [RT] sp500 update
>>
>>
>>
>>>Hello
>>>
>>>NASDAQ is now in more trouble, it may not bottom on Monday
>>>
>>>the sp500 is in a better shape and likely support is between 1193-1197
>>>
>>>I would be a buyer at that level Monday/Tuesday
>>>
>>>stop loss at 1189
>>>
>>>profit objective is 1225-1235
>>>
>>>cycle is suggesting 3/16 as low
>>>Ben
>>>
>>
>>
>>
>>
>>Yahoo! Groups Links
>>
>>
>>
>>
>>
>
>
>
> --------------------------------------------------------------------------------
>
>
> No virus found in this incoming message.
> Checked by AVG Anti-Virus.
> Version: 7.0.308 / Virus Database: 266.7.2 - Release Date: 3/11/2005
>
>
>
------------------------ Yahoo! Groups Sponsor --------------------~-->
What would our lives be like without music, dance, and theater?
Donate or volunteer in the arts today at Network for Good!
http://us.click.yahoo.com/Tcy2bD/SOnJAA/cosFAA/zMEolB/TM
--------------------------------------------------------------------~->
Yahoo! Groups Links
<*> To visit your group on the web, go to:
http://groups.yahoo.com/group/realtraders/
<*> To unsubscribe from this group, send an email to:
realtraders-unsubscribe@xxxxxxxxxxxxxxx
<*> Your use of Yahoo! Groups is subject to:
http://docs.yahoo.com/info/terms/
|