Yeah I know, the "illegal" recurring joke is just because the boys kept telling me that I will visited by the authorities because of my dodgy betting on both sides of the book.
It doesn't matter what the position size is. Whether 1 contract or 1000. All you're doing is what I call a PnL lock. You're capturing a move for a win no matter which direction the thing goes. As someone else mentioned up above, the real trick is when to close the losing leg. Ultimately all you're doing is trying to time the peak or trough of a cycle, which you might as well do with just one leg so you have half the trading expense.
George Soros would take inverse positions at times - just some food 4 thought. "As a general principle, I do not dismantle positions that are built on a thesis that remains valid; rather, I take additional positions in the opposite direction on the basis of the new thesis. The result is a delicate balance that needs to be adjusted from moment to moment. If the balancing act fails to protect the portfolio, I have to cut back all around in order to assure survival. If the balancing act is successful, I gain liquidity without having to sacrifice desirable positions. To illustrate: if I start with a fully invested position and then sell short an equal amount, a 20% decline, even if it affects the longs and the shorts equally, leaves me only 80% invested on the long side. If I cover my shorts at the right time, I come out way ahead, but even if I cover my shorts with a loss I am better off than if I had sold my longs at the wrong time. In practice, the operation is much more complex because the balancing act is not confined to the stock market." George Soros
%% TRUE; + slippage tend to be NOT equal, even in liquid markets, though @ end of day, may appear much the same. I dont agree with much of his public policy, but like G Soros noted ''the market has a bias'' PUT another way insurance co tend$ to be good with risk; but Dave Ramsey notes , some things you would want to insure yourself= half the trading-investing expense. I seldom buy 12 months or[ one month insure contract=2 expensiveLOL]