Oh There are a few ways I tend to manage the hedge depending on how I am feeling. I know I keep saying this but I am going to explain it more in depth in the future. Sometimes the hedge won't always work out. You put it on and price immediately goes against it until you close your main position. This is no big deal, it's just what happens sometimes. Position sizing is important.
9/1: SPY -$14,820.00 hedge $2,612.76 Net for this trade -$12,207.24 (unrealized) $1,223.60 (realized) $2,931.69 (realized) $1,129.72 (dividend) ------------------------ -$6,922.23
9/2 SPY -$32,433.00 hedge $3,938.25 Net for this trade -$28,494.75 (unrealized) +$1,223.60 (realized) +$2,931.69 (realized) +$1,129.72 (dividend) ------------------------ -$23,209.74 Are we going back down? Good thing I didn't close out the hedge yesterday. lol. Next update will be on Tuesday since the market is closed on Monday.
9/6 SPY -$37,335.00 hedge $4,278.42 Net for this trade -$33,056.58 (unrealized) +$1,223.60 (realized) +$2,931.69 (realized) +$1,129.72 (dividend) ------------------------ -$27,771.57
9/7: SPY -$18,525.00 hedge $2,800.44 Net for this trade -$15,724.56 (unrealized) +$1,223.60 (realized) +$2,931.69 (realized) +$1,129.72 (dividend) ------------------------ -$10,439.55 back and forth
Hi abc, I threw together a quick chart to get a grip on the trade management. Are you sizing your hedge around a % fractional bet? Obviously I had to make a lot of assumptions on this data. Could you elaborate on the pieces regarding the sizing. thanks.
9/8 SPY -$25,650.00 hedge $3,340.02 Net for this trade -$22,309.98 (unrealized) +$1,223.60 (realized) +$2,931.69 (realized) +$1,129.72 (dividend) ------------------------ -$17,024.97 trackstar, nice chart. I'm in a hurry now (hence why this post is late today) but I'll talk about that soon.
9/9 SPY -$43,434.00 hedge $4,712.43 Net for this trade -$38,721.57 (unrealized) +$1,223.60 (realized) +$2,931.69 (realized) +$1,129.72 (dividend) ------------------------ -$33,436.56
The next div date is Friday, 9/16. The average SPY dividend this year so far has been $0.59. If that is the value of the next dividend then I will get a payment of $3,363 to be added to the net total of this trade.
SPY -$39,159.00 hedge $4,325.34 Net for this trade : +-$34,833.66 (unrealized) +$1,223.60 (realized) +$2,931.69 (realized) +$1,129.72 (dividend) ------------------------ -$29,548.65