riskarb's trading journal

Discussion in 'Journals' started by riskarb, May 13, 2006.

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  1. Nope. Missed two short entries due to my inability to set static-stops. I think we're out of the woods.
     
    #681     Jul 12, 2006
  2. Thanks for the support. =)
     
    #682     Jul 12, 2006
  3. I am long USD/CHF and a 24h no touch at 1.2360 -- signal was pattern-based; long the USD bull trendline + additional confirmation on the hourly cash chart. On VPN to my remote in NV, but Citrix is very slow today.
     
    #683     Jul 12, 2006
  4. Thanks...just curious because on the other double notouch's you did hedge. Also are you able to take the position off at any time? IOW do you HAVE to hold till Fri? How was the conference? I'm sure there were a lot of ET'ers there:D
     
    #684     Jul 12, 2006
  5. Looks like NDX barrier was taken out :eek: Bad luck Riskarb.

    A two sided-market can be quoted for these at anytime so yes, the option can be bought back prior to expiration.

    Random thoughts:

    Without hedging, the no touch becomes a straight bet on time.

    With (full) spot hedging based on $debit of the barrier, potential loss into the barrier is negligible and even the prospect of "convergence gains" (gains on the hedge AND barrier not being hit) or if spot runs well past barrier, gains on the hedge larger than loss on the barrier. I think I saw Riskarb say this was the edge to the strategy.

    So, in theory, drawdowns should be negligible. Whipsaw on spot hedge is one of the risks (negates the edge?). Spot volatility greater than implied when touch sold is another risk :eek:

    Gamma is very large approaching the barrier but if hedging based on $ values and holding to expiration, who cares?

    The concept is so simple, even I get it! However, discretion and skill are required for entry and hedging points and timing.

    2 cents.

     
    #685     Jul 13, 2006
  6. Sorry to see you leave , Risk. Thanks for all the help and keep in touch , u got my info. Good luck with everything.
     
    #686     Jul 13, 2006
  7. Where did a fight break out... what did I miss ??!??!!?!
     
    #687     Jul 13, 2006
  8. JayS

    JayS

    #688     Jul 13, 2006
  9. His comments were made in ET chat. Available in the chat logs.
     
    #689     Jul 13, 2006
  10. ready

    ready

    What kind of word is that it is not even in any of the searchs i did.
    hydroencephalic
     
    #690     Jul 13, 2006
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