Do i correctly understand futures trading risk in a worst case scenario?

Discussion in 'Index Futures' started by birdman, Jun 26, 2024.

  1. If you don't close out a position and your account has a debit you owe them money. There's no way to get around that due to an LLC. Why should there be a way? If you take a position and lose you need to pay accordingly.
     
    #11     Jun 26, 2024
    birdman likes this.
  2. Businessman

    Businessman


    LOL, i don't think we are going to get ASI (Artificial Super Intelligence) any time soon.

    These Large Language Models are more like Artificial Super DumbAss (ASD :D) and make shit up when asked a question that is outside their training set.
     
    Last edited: Jun 26, 2024
    #12     Jun 26, 2024
    birdman likes this.
  3. maxinger

    maxinger

    upload_2024-6-27_6-55-21.jpeg upload_2024-6-27_6-55-28.jpeg



    Forget about what you have written. This is the worst-case scenario.

    You entered a position.
    Then suddenly,

    -there is an Exchange problem and trading cannot be done

    -the shark bites the ocean cable

    -the internet service provider is on fire

    When trading resumes, you are highly negative.


    A few years ago, I had a not-so-big position trading OMX Exchange products.
    Suddenly The exchange was down.
    When the Exchange opened 4 hours later, I closed my position and lost about $5K.
    To hell with OMX!


    Good Luck!!!
     
    #13     Jun 26, 2024
    tomas262, Bugsy and birdman like this.
  4. birdman

    birdman

    The discussed scenario was without holding a position at the time of drop.
     
    #14     Jun 26, 2024
  5. Bad_Badness

    Bad_Badness

    What Maxinger describes, in general, is a disorderly market. Retail orders are delayed, market circuit brakers go off, MULTIPLE TIMES.

    So there is a VERY real chance you could get caught in this. It happens so often, it should be considered in your plan.

    Example: LEH bros collapse. I could not close SP500 future contracts for 45 minutes with a market* order at IB. Fortunately, profit just shrunk to about 1/5 of what possible if I could have closed within 1 minute of the open.

    Don't be a newbie an think this is like making a purchase at an apple store. This is trading, exchanges, OTC, order flow, circuit brakers, HFT stepping in front etc.

    * and the order was placed at 9PM EST before the next day open.
     
    #15     Jun 26, 2024
    birdman likes this.
  6. Overnight

    Overnight

    You're both over-and-under thinking it.

    There's a reason the MNQ exists, since May 2019...To save people like you from yourself.

    That you have the unmitigated gall to even THINK of trading more than 1 NQ with less than $50,000 in your account is audacious...And then you talk of FIFTY NQ? The FACK is wrong with you?

    Get FACK out, get FACK out bull in China shop...



    And so the micros are for you.
     
    #16     Jun 26, 2024
    Bugsy likes this.
  7. Businessman

    Businessman

    I actually got to 100 NQ lots per trade back in 2008, admittedly 100 NQ had about the same notional value back then as 100MNQ does today.
     
    #17     Jun 26, 2024
  8. Overnight

    Overnight

    "admittedly. the margin burden was 10-times less". So stop talking. Oy!

    You deserve a punishment.

    Memorize these lines in a week, or be banned from ET for a month.



    Pffffhhhht.
     
    #18     Jun 26, 2024
    piezoe likes this.
  9. SunTrader

    SunTrader

    It was hypothetical question.

    A what if they likely never would encounter, not because chit don't happen but because they would never put on such size.
     
    Last edited: Jun 27, 2024
    #19     Jun 27, 2024
    birdman likes this.
  10. Bugsy

    Bugsy

    The swings in NQ are pretty steep. With ES setting an entry and exit on a move has a pretty manageable point spread and ATR so if the market moves against you it's just a equitable loss you've factored into your system.

    NQ spreads tend to run several multiples of the ES ATR, so a loss can easily go outside risk level.

    There are enough swings in ES to take positions both inside and outside of market hours that I never saw the upside of trading NQ.

    Of course, this is all subjective, and NQ could easily be perfect for the next trader.
     
    #20     Jul 2, 2024
    birdman likes this.