How so? What if you're short and the market gaps up 20 points on Sunday night? Or the market surges 30 points in 30 minutes? Both have happened at least once.
I thought we were talking about a "flash crash" kinda thing , and upward moves are slower than the down side ...
Does not matter if it's a flash crash or not, you're still 20 points in the hole. Price shocks can occur upward as well. With oil in particular, I think price surges are probably more common than crashes. Not that long ago, oil actually went up about 3$ in an extremely short amount of time when some news hit the wire. A minute maybe? My point is that while longs fear a crash, shorts should not feel safe either, as history shows it can be just as risky to be caught short these days.
20 points is nothing , the idea was to eliminate some not all the risk of a rare event , basically the market could be limit down within few minutes . ofcourse that is not applicable to commodities ....
Thats a myth. The upward moves were dramatically sharper than downward moves between the years 1997-2000, of course the subsequent move down after 2000 was just as quick but thats another story. You are risking your money each time you put in a trade, long or short it doesnt matter, there is no such thing as a "safer" trade.
I meant in a single spike , anyway ofcourse futures are very risky and not safe , but the idea was which is better to trade long and short or just shorts to eliminate the rare event risk "somewhat" , just food for thought ...
I was talking about single spikes. SPX wasnt that bad but if you were short the NQ during that period...