Re: [SuperTraderKarenStudy] Hedge with /ES


Sep 2, 2015

 


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#5015 Sep 2, 2015

Anyone successful at hedging on down moves by shorting /ES futures? I have tried many times, but with the mentality of not giving back any premium, I hate losing money on the /ES short when the market turns back up. It is always a struggle, as I feel like I am too late when I put them on and take them off too early in efforts to limit losses on the hedge. I have been mechanically doing it for years, but feel like it is wasted efforts at times. It doesn't help your margin when trading SPX, and 9 out of 10 times, I take off the position for a small loss. Other than a little peace of mind, I am not sure why I do it. I have even looked at buying them back when they are profitable, and using that premium to offset a roll down of a put in the SPX, but that has proven hard to time and when the market is moving down, it is hard to give up those hard negative deltas that ES shorts give you. �� ����

Anyone have success with shorting /ES as a delta hedge?��



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#5016 Sep 2, 2015

TMPAUDIO,

good question, should write Tom at tastytrade.com and ask for his advice.

--

Best,

Daniel



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#5018 Sep 2, 2015

No, although a long time ago I would buy ES options to lock in the loss and give myself time to decide what to do without the loss getting larger. ��Not a great strategy, but it helped on a couple of huge downmoves.

I have since moved to trading more directionally and staying out of the way of the large drops. ��Not foolproof either (nothing is selling options) but limits damage.

Jeff



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#5024 Sep 3, 2015

I was quite successful doing that during this selloff. Things weren't looking right to me so I sold /ESU5 on 8/21 for.2010.25. I was never in danger of a margin call, but it sure did make a difference when the market dove after that. After things calmed down a little a few days later I bought it back at.1941.50 .for a nice little profit. Note that I don't know that I could replicate this in future. I think it was one of the three times in my life I have been right on market direction.

On Wed, Sep 2, 2015 at 6:20 PM tpmaudio1@... [supertraderkarenstudy] supertraderkarenstudy@yahoogroups.com> wrote:

.Anyone successful at hedging on down moves by shorting /ES futures? I have tried many times, but with the mentality of not giving back any premium, I hate losing money on the /ES short when the market turns back up. It is always a struggle, as I feel like I am too late when I put them on and take them off too early in efforts to limit losses on the hedge. I have been mechanically doing it for years, but feel like it is wasted efforts at times. It doesn't help your margin when trading SPX, and 9 out of 10 times, I take off the position for a small loss. Other than a little peace of mind, I am not sure why I do it. I have even looked at buying them back when they are profitable, and using that premium to offset a roll down of a put in the SPX, but that has proven hard to time and when the market is moving down, it is hard to give up those hard negative deltas that ES shorts give you. . ..

Anyone have success with shorting /ES as a delta hedge?.



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#5025 Sep 3, 2015

Congrats, nicely played.



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#5027 Sep 3, 2015

Yes, I think I am going to stop trying the futures hedge for a while. I have not lost much in the process but it seems to create more stress than it relieves. I find myself nervous on the ride down, then worried about when to cover the /es shorts on the way back up. Makes it too directional, which I am simply not good at directional trading. Will learn to sit on hands.

Tyson



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