3309 Drysdale Ct
Edwardsville, IL 62025
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.
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 interesting idea. I'm going to
test that out. - Matt.
Never average losses by,
for example, buying more of a stock that has fallen.” - Jesse
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
Well stated brophy
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