I will be giving a Live demonstration of this technique on Tuesday 14 Oct 2003. p.s. If I forget "PLEASE" PM me. I often forget because I'm so busy balancing so many task at once. .......See ya Tuesday! 10-10-03 07:32 AM Re: Options as a hedge -------------------------------------------------------------------------------- Quote from mBear: If you want to hedge a short futures position, why not use an out of the money call? For example, lets say you shorted es 1040 and bought a 1060 call. Now, you expect the call option to expire worthless, but you have defined your maximum risk for the trade as 20 handles plus the cost of the option. You can stay short until options expiration, no matter what the market does. You can exit the short anytime you think the market is turning back up, then sell the call sometime thereafter to recover a part of the cost of the option. Now, the hedge hasn't limited your profits, where in the case of the deep in-the-money call, you loose so much value, even though the market is going your way, profit potential is limited. -------------------------------------------------------------------------------- NOPE. Wrong again! In the "JACKASS" system you have -"NO RISK" & "NO FUTURES MARGIN REQUIREMENT"!!!! In your example you would have to put up "SPAN" margin. And you still have "RISK". In my example the profit potential is -"UNLIMITED"!!!
YES. See below. http://www.elitetrader.com/vb/showthread.php?s=&threadid=23133&perpage=6&pagenumber=3