Being both long and short at same time

Discussion in 'Options' started by qlai, Jan 23, 2019.

  1. JSOP


    Could've done this with options, just buy call + put at the same time with the same strikes
    #11     Jan 23, 2019
  2. qlai


    It's kind of like gamma scalping, no?
    #12     Jan 23, 2019
  3. Not getting in the market has the same effect as being long and short, minus the commissions. There has to be a point at which he would cut one and keep the other, so why not just make that the first entry point?
    #13     Jan 23, 2019
    Overnight likes this.
  4. Robert Morse

    Robert Morse Sponsor

    #14     Jan 23, 2019
  5. Specterx


    The main rationale I can see for this is if you're trading multiple timeframes or systems at once - thus a longer TF may be holding long for the trend while a shorter TF gets an RTM short signal.

    Otherwise, it sounds like one of the contortions that novice traders go through to try and escape the realities of expectancy and needing to correctly assess it at every point in the trade.
    #15     Jan 23, 2019
    Overnight likes this.
  6. qlai


    Right, now you can gamma scalp ... when price moves up, short the underlying. As price moves back down, cover. You are never under risk of large adverse move. So can this structure be set up synthetically? You have both long and short positions - that is your box. Now bid and offer inside that box without worrying about explosive moves. Isn't this what Market Makers do when they hedge with the underlying? They capture the spread minimizing the risk of being run over.
    #16     Jan 23, 2019
  7. Overnight


    I realize where the guy is coming from, but from what I hear in those few minutes past the 22 minute mark, as qlai pointed out, he's not implementing it properly to make that "hackey" method work.

    It is a roughshod way around margin requirements, in my mind, and would only work if you truly know the swing ranges of your timeframes and risk exposure, and only if you know the rules. I've been down that road, and it is a delightful road if you truly know the market you are trading.

    As far as the rules go, going long/short in the same beneficial ownership deal in the same instrument month can lead to trouble. You have to be careful. The area is very very grey. 'Tis why I expanded it to multiple months in CL, where all was golden fries at McD.

    The method he is describing is what made me my first 10K in trading in 3 months. It was neat. But my system was a lot simpler than his I suspect. And just a little less dangerous, because it was one contract.
    #17     Jan 23, 2019
    yc47ib likes this.
  8. Robert Morse

    Robert Morse Sponsor

    Gamma Scalping is using options to hedge with futures as the symbol moves up and down, your delta changes. Offsetting futures is not a hedge, it is wash. Buying 10 delta of calls and hedging with 10 future is a hedge.
    #18     Jan 23, 2019
  9. Visaria


    To give an example, some longer term passive investors may use index futures rather than index funds/ETFs in one acct and in another they may be doing shorter term trades.
    #19     Jan 23, 2019
  10. maxinger


    basically the market has been quiet. And you are expecting price to move explosively (could be up or down).

    So you go long and short at the same time.
    You have to do it on two accounts.
    #20     Jan 23, 2019