Need some help from the A-Team - I just can't seem to get
hedging right. I am typically only available to trade pre
and post-market. When I hedge and the market goes down, like
today, I am not hedged enough to stop the pain. If I hedge
and the market goes up, I will have hedged too much. I
would appreciate any guidance the community can offer on how to
hedge an equity & option portfolio on a daily (not intraday)
basis. Should I be using a leveraged instrument? Or a
volatility instrument? How do I calculate how much to hedge
to purchase? TIA - Matt.
Personally, I think a big part of hedging is not the hedging
itself, but knowing when your longs are not progressing as they
should so it is time to put hedges on or get smaller. Yesterday
before noon I felt that all my longs felt weaker than they should
be, so got flat. It's a feeling you get after trading for
years. Sometimes what your positions are not doing is more
important than what they are doing.
Thanks Brophy. I appreciate you taking the time to
respond. Unfortunately I just don't have the availability to
watch the portfolio during the day to get a "feel" for intraday
activity. I think that's one of my biggest challenges.
I am setting up trades for the breakout plays shown in
the newsletter that automatically executes when the trigger price
is hit. I use ToS "One triggers all" to automatically create
a stop trade at the same time. When the market goes
south, all my stops are hit. This can add up quickly.
I may just have to have tighter stops and set up
another trigger if I get stopped out.
Posted by bulf6285 on 12th of Aug 2020 at 09:22 am
z0ned, I'm in a similar boat to you. The way I handle it is
position size. If I want a 50 share position, I buy 25 at the
trigger, and another 25 lower in case of a backslide in price. This
gives me a lower average cost and allows me to have a wider stop.
If it never goes down, great... I just have a smaller position with
no loss. Just my 2 cents.
I dont know if I agree with this. If you understand the company
well, then i would add. But if you are a short term trader its a
different story. I was negative big on banks and airlines. But i
added them strategically and made it big. But if you are
playing options, then you need to cut them loose because the risks
are high
Need some help from the
Posted by z0ned on 11th of Aug 2020 at 09:06 pm
Need some help from the A-Team - I just can't seem to get hedging right. I am typically only available to trade pre and post-market. When I hedge and the market goes down, like today, I am not hedged enough to stop the pain. If I hedge and the market goes up, I will have hedged too much. I would appreciate any guidance the community can offer on how to hedge an equity & option portfolio on a daily (not intraday) basis. Should I be using a leveraged instrument? Or a volatility instrument? How do I calculate how much to hedge to purchase? TIA - Matt.
Personally, I think a big
Posted by brophy on 12th of Aug 2020 at 07:27 am
Personally, I think a big part of hedging is not the hedging itself, but knowing when your longs are not progressing as they should so it is time to put hedges on or get smaller. Yesterday before noon I felt that all my longs felt weaker than they should be, so got flat. It's a feeling you get after trading for years. Sometimes what your positions are not doing is more important than what they are doing.
Thanks Brophy. I appreciate you
Posted by z0ned on 12th of Aug 2020 at 09:14 am
Thanks Brophy. I appreciate you taking the time to respond. Unfortunately I just don't have the availability to watch the portfolio during the day to get a "feel" for intraday activity. I think that's one of my biggest challenges. I am setting up trades for the breakout plays shown in the newsletter that automatically executes when the trigger price is hit. I use ToS "One triggers all" to automatically create a stop trade at the same time. When the market goes south, all my stops are hit. This can add up quickly. I may just have to have tighter stops and set up another trigger if I get stopped out.
z0ned, I'm in a similar
Posted by bulf6285 on 12th of Aug 2020 at 09:22 am
z0ned, I'm in a similar boat to you. The way I handle it is position size. If I want a 50 share position, I buy 25 at the trigger, and another 25 lower in case of a backslide in price. This gives me a lower average cost and allows me to have a wider stop. If it never goes down, great... I just have a smaller position with no loss. Just my 2 cents.
Thanks Bulf - That's an
Posted by z0ned on 12th of Aug 2020 at 09:47 am
Thanks Bulf - That's an interesting idea. I'm going to test that out. - Matt.
" Never average losses by, for example,
Posted by brophy on 12th of Aug 2020 at 09:53 am
" Never average losses by, for example, buying more of a stock that has fallen.” - Jesse Livermore
I dont know if I
Posted by arun on 12th of Aug 2020 at 09:58 am
I dont know if I agree with this. If you understand the company well, then i would add. But if you are a short term trader its a different story. I was negative big on banks and airlines. But i added them strategically and made it big. But if you are playing options, then you need to cut them loose because the risks are high
Well stated brophy
Posted by steve on 12th of Aug 2020 at 07:51 am
Well stated brophy