For hedging to be effective, it usually helps to have it in place before the event unfolds. Usually having a plan before trading starts helps as well. Maybe it's just me? Good Luck!
That's all well and good, and delightfully vague. However, we're still waiting for an actual example. You know, one with numbers? I'm not suggesting it can't be done. I would just like to see an example of it where the cost-benefit is demonstrated over a simple exit and re-entry approach. Try to keep your exasperation and righteous indignation to a minimum. You forfeited those when you insulted me for asking an honest question. And if you think it is beneath you to deign a response to my question, after you insulted me, then I can only surmise that you are all talk and no trousers. I'm OK with that, too.
So all these that are exiting the market today were hedged? Their positions certainly seem to be moving the markets. Sounds to me that you haven't a clue as to what hedging even is.
Today is just a mega stop loss triggered by carry traders borrowed against Yen. They can either exit their positions or they can sell index futures to hedge. Either way it brings down the market. Who says "hedging" by selling the index won't move market? Just shut up Algorithm, you don't know what you're doing. Or maybe you don't trade, you just type on ET... then obviously you don't know what you're talking about
Thank you for your response. I have heard and read about this as well and I suppose it is so. Of course, I am nowhere near the size that may require such form of hedging, nor do I expect to ever be in that position. I am a very small potato in the scheme of things, as I suspect that most of us are here. That is why I found it fascinating that Algorithm would respond with a suggestion to "just hedge" in this thread in relation to risk control for us ETers. Fascinating. Further, the absence of a concrete example only adds to the mystique.
Okay, there Thunder, oh mentol. I love the explaination of today's action as well. Interesting indeed. Me likey the new name. Pathetic. Good Luck!
I do not now have, nor have I ever had, an alias at ET. I have no need for it, and I already spend too much time here anyway. If you think I am lying, then contact Baron and ask him investigate. If my claim that I have never had another alias on ET is incorrect, then I hereby grant you the right to have me banned for now and forever. Baron, please take note. Meanwhile, your insults have not yet diverted us from the absence of a concrete example, complete with numbers, of a hedge in which you have engaged, showing why it should be favored over a simple exit and re-entry. I direct you, once again, to the all talk and no trousers reference made earlier.
You're seemingly making a bad assumption ... that being that people only hold long positions. On days like today one can make decent money with existing or new short positions.