Protect Open Positions When Exchange CRASHES

Discussion in 'Index Futures' started by Spectra, Jan 12, 2007.

  1. Bearish Trader (a Jr Trader on the site) has made a video on what to do when the exchange goes down and your in a position. (like right now)

    He was inspired to do this because of yesterdays outage but looks like history has repeated

  2. Key points from the video:

    Hedge a YM position with an opposite position of ES. The ratio is 1 ES to 3 YM.

    If you're trading a smaller number of YM contracts (1 or 2) you can hedge using the DIA ETF at a ratio of 500 shares per YM contract.

    I suspect that the correlation between YM and ES is not 100% though pretty close 90%+. Whereas the YM-DIA correlation is damn near 100%
  3. thanks for the recap steve

    CajunSniper / Administrator-Trader
  4. I posted earlier, I heard today the ecbot was crashing as a result of the synthetic quotes they were generating for the grains and have made changes that should not result in future crashes. That is just what I heard and shoud a good source and should not be construed as fact. I will still be ready to jump to any exchange in the world to hedge or trade, if you are not you should not be trading anything you can not afford to loose. In non hedged equation it can only go to zero, do the calculations to see what your real risk is and then trade that way only if you can take the heat.