Am I asking for too much?

I want to ask a specific question:

is it possible to pairs trade ONLY long positions on both call and put options?


That is, purchasing calls and puts on a underlying index and profiting from discrepancies or mispricing between different market makers?

I know it can be done if you write options. What if you can only go long? is it TECHNICALLY possible?

thanx for your insights..
 
Quote from Steve Tvardek:

Your goal should never be monetary when you start, your goal should be to effectively learn how to trade the market of your choosing.
More...

If there's no goal to the upside as to how much one should

make, then should there also be no limit to their downside

as how much they lose before calling it quits (intraday)?
 
Quote from cashmoney69:

If there's no goal to the upside as to how much one should

make, then should there also be no limit to their downside

as how much they lose before calling it quits (intraday)?
More...

i guess what he means is that we shouldn't put a a limit where profits are concerned. The amount is dictated by the liquidity in the market at that very moment.

i dont think you can infer the same idea for losses. These should be thought of beforehand and controlled with stops or whatever other means.

just my 2 cents.
 
This may sound pompous but its what I believe. Winners dont quit. They size down, allow themselves to get back in rhythm and become more patient so that they do not lose control. Opportunities come all day, everyday. The market has no idea if you are personally up or down for the day. So why place arbitrary limits? If you are the type of person who cannot control themselves and will dig a deeper hole by trading irrationally, then yes maybe that person should have a loss limit. But the experienced gained from being down, becoming more patient and still able to take advantage of an oppotunity w/o hesistating is a very good sign of a traders growth. Giving up b/c you are down $500 of whatever for the day is not.

Quote from cashmoney69:

If there's no goal to the upside as to how much one should

make, then should there also be no limit to their downside

as how much they lose before calling it quits (intraday)?
More...
 
Quote from c.chugani:

I want to ask a specific question:

is it possible to pairs trade ONLY long positions on both call and put options?


That is, purchasing calls and puts on a underlying index and profiting from discrepancies or mispricing between different market makers?

I know it can be done if you write options. What if you can only go long? is it TECHNICALLY possible?

thanx for your insights..
More...

I have been market neutral for 15 years over 500,000 trades.

The smartest thing you can do...
Is decide to be obsessively market neutral for the rest of your life...
Except sometimes you might go 60/40 long or short.

That's right, you will only practice various forms of relative value arbitrage.

Stock picking and making directional bets is for losers...
Which is EXACTLY what your broker will train you to do.

Always remember...
The Securities Industry (including ET)... is NOT "your friend".
The ONLY reason the industry exists is to take your money.

http://www.google.com/search?hl=en&q="market+neutral"+"relative+value"+arbitrage&btnG=Google+Search

Good luck.
 
Quote from QuantPlus:

I have been market neutral for 15 years over 500,000 trades.

The smartest thing you can do...
Is decide to be obsessively market neutral for the rest of your life...
Except sometimes you might go 60/40 long or short.

That's right, you will only practice various forms of relative value arbitrage.

Stock picking and making directional bets is for losers...
Which is EXACTLY what your broker will train you to do.

Always remember...
The Securities Industry (including ET)... is NOT "your friend".
The ONLY reason the industry exists is to take your money.

http://www.google.com/search?hl=en&q="market+neutral"+"relative+value"+arbitrage&btnG=Google+Search

Good luck.
More...

thanx for the advice.

sounds like a very sensible way to approach trading.

any good books on the matter? I heard that Pairs Trading by Ganapathy Vidyamurthy is a good read.

Any other good books for market neutral trading strategies?
 
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