Being both long and short at same time

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

  1. sle


    So net you are flat. Yeah, that makes sense!
    #31     Jan 23, 2019
  2. There might be. Let's say you go ES long and short, with a stop-loss at 10 ticks on each. On the profit side, you set a trigger at 10 ticks to submit a trailing stop. If ES goes up >10 ticks, the short contract hits the stop-loss for a loss of 10 ticks, while the long contract books profits as long as it continues to go up, with profits protected by the trailing stop. If the trail is 1 tick, and ES goes up 14 ticks before retreating in this scenario, you profit 3 ticks.

    I'm not trading this, nor will it likely work with these numbers -- there's volatiity to account for, etc. But it's a hypothetical example where being long and short simultaneously could be beneficial.
    #32     Jan 23, 2019
  3. maxinger


    I used to do that years ago.
    I used it on quiet market, and market was waiting for some explosive news (eg major economic data release, court ruling ...).

    when the news is out, market would move rapidly up or down.
    one of the positions will be stopped out, then the other position will be in profit.

    In theory it make sense but in practical, it didn't because of price slippage, internet time lag ....
    #33     Jan 23, 2019
    MattZ likes this.
  4. sle


    Maybe I am being dumb here, but what prevents you to start with a flat book and just put stop orders in both directions instead of having a box? I.e. if you have
    account A: 1 long       / order: sell stop -10 ticks 
    account B: 1 short      / order: buy stop +10 ticks
    it's equivalent to
    account A: nothing     / sell stop -10 ticks & buy stop +10 ticks 
    #34     Jan 24, 2019
    destriero likes this.
  5. MattZ

    MattZ Sponsor

    This whole "long and short" at the same time started in the Spot FX world, where they called it "hedging." Primarily, the idea was that you could somehow time your long and short positions at the same time rather than admit to an understandable plain vanilla loss. In the USA, "hedging" is not allowed. All trades are offset with one another.

    You may have different time frame strategies, and that could be administered in separate accounts, but it very unlikely that both instruments would be triggered at the same time. When people say they have a "hedge" strategy, either they paper trade or I know how the P&L looks like.
    #35     Jan 24, 2019
  6. maxinger


    Interestingly, some trading platforms allow you to do this (just account A).

    If trading platform doesn't allow you to do both long AND short,
    then you have to use account A and B.
    #36     Jan 24, 2019
  7. traider


    being long and short at the same time is the best thing for a trader without edge! It allows you to put on trades, satisfying the gambling mentality and yet only just lose commission + spreads.
    #37     Jan 24, 2019
  8. destriero



    The ability to carry a long and short in the same account is being FLAT, synthetically. Flat is not synonymous with a netted futures trade in two accounts.

    The very reason this is forbidden by regulators is to save you from yourself. Now, please elaborate how you would effect a long and short ES in your Advantage futures degen account.

    It's the same as placing buy and sell stops. Made exotic by forcing the trade in lieu of trading inside the stops (no trade). It's not simply double the comms and slippage... it's much, much worse.

    WTF! is wrong with you people?
    Last edited: Jan 24, 2019
    #38     Jan 24, 2019
    sle and MattZ like this.
  9. There is an entire field of forecasting based on combining predictions and even models together. In many (if not most) situations, you're going to get a more accurate prediction from leveraging the strengths of different models, especially if they capitalize on very different aspects of the data.

    In the simple case of 2 models, I'd look at a hold out period of data to see if one did better than the other in particular situations and weight them accordingly.

    Here are some quick references:
    #39     Jan 24, 2019
  10. Yes sir
    #40     Jan 24, 2019