Being both long and short at same time

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

  1. qlai

    qlai

    Are we saying the same thing?

    "Gamma scalping is the process of adjusting the deltas of a long option premium and long gamma portfolio of options in an attempt to scalp enough money to offset the time decay of the position."
     
    #21     Jan 23, 2019
  2. Robert Morse

    Robert Morse Sponsor

    I did not watch the entire video and I'm going to. The comment made was"the guy describes how he has two separate accounts to be able to be both long and short at the same time." If he is buying futures at one and hedging at another, that makes no sense from a margin perspective and adds nothing. If he is long futures in one and short futures in another, that makes less sense. There is just no advantage to split your positions in one product over two FCMs.

    Trading an arb from one future to another that is similar (Gold vs Gold) or to an ETF, is not what was asked by the poster.
     
    #22     Jan 23, 2019
  3. qlai

    qlai

    So you book profits in one and wait for price to revert in another? That's not what the guy is doing ... he is scalping.
     
    #23     Jan 23, 2019
  4. Robert Morse

    Robert Morse Sponsor

    Why not just be flat.
     
    #24     Jan 23, 2019
    Visaria likes this.
  5. Robert Morse

    Robert Morse Sponsor

    Yes but the post did not ask about options. and why do that at two FCMs?
     
    #25     Jan 23, 2019
  6. qlai

    qlai

    Because there's a difference between open and closed pnl. If you believe in mean reversion and have enough time and margin to see it through, you don't need to guess the direction. Book profits and wait for the opposite half to revert back to break even or overshoot in opposite direction. Now take it to small range and split second time frame and you start market making.
     
    #26     Jan 23, 2019
  7. Robert Morse

    Robert Morse Sponsor


    Ok, after this I tap out. 1256 contracts in the US are mark to mark for taxes. There is no difference between a P/L from an open position and a closed one. They are taxed the same. There is no difference between realized and unrealized. Booked profits in one place and not in another are the same. Sales do not require a locate like stocks and there is no down-tick rule.
     
    #27     Jan 23, 2019
    Overnight likes this.
  8. qlai

    qlai

    Robert, I appreciate your input. At no time do I ever think I know more about market making than you :) There strategies where people sit through large open losses to end up small but consistent closed proits.
     
    #28     Jan 23, 2019
  9. JSOP

    JSOP

    What if the price doesn't move at all? You lose all of your premiums.
     
    #29     Jan 23, 2019
  10. destriero

    destriero


    Please stop.
     
    #30     Jan 23, 2019
    sle likes this.