If you hold overnight positions/swing trade, how do you hedge against gaps up/down?

Discussion in 'Trading' started by Nutinsider, Oct 20, 2012.

  1. Visaria

    Visaria

    Ok, you have a point. I think of margin sort of differently in that I nominally fund my trading.
     
    #21     Oct 22, 2012
  2. both tactics are too expensive for me
     
    #22     Oct 22, 2012
  3. actually, I employ the most expensive (when it comes to opportunity costs)

    I trade small enough that a gap is just another bump in the road

    I expect them, endure them and half the time enjoy them.
     
    #23     Oct 22, 2012
  4. sometimes I think the only difference between trading and investing is margin

    the investor uses his hard earned money

    the trader goes out and borrows to fund his crazy ideas
     
    #24     Oct 22, 2012
  5. You're right...that would be quite an analysis. Since Futures Options historic pricing is likely either not available or mucho expensive, doing this with an IB test account would be the way to go.
     
    #25     Oct 22, 2012
  6. 007Arb

    007Arb

    I don't believe in margin unless you are just starting out and have a four figure account. According to you I am an investor, even more so if I told you I only trade open end equity/bond funds. This year (a typical trading year) I will make about 500-600 trades spread among three accounts. I am almost daily increasing/decreasing/moving to the best relative strength funds etc., but I would hardly categorize my style as that of an investor.
     
    #26     Oct 22, 2012
  7. so what is your average annual return?
     
    #27     Oct 22, 2012
  8. 007Arb

    007Arb


    Unlike when I had a smaller account, average annual return is meaningless to me now. As your account *compounds* over the long haul it obviously takes a smaller and smaller annualized return to generate a large dollar return. One of the perks of getting older and being in the game a long time.
     
    #28     Oct 22, 2012
  9. yeah well, we weren't talking about old men getting older, we were talking about young men supporting a wife and children

    My guess is you had a real job, so when it comes to trading for a living you don't really know what you are talking about

    but congratulations for managing the money the company paid you well
     
    #29     Oct 22, 2012
  10. 007Arb

    007Arb


    Check the archives.
     
    #30     Oct 22, 2012