Carry both long and short position over night

T

TaoTrader

I am a newbie looking to open a future account. But I have a question that I know many of you knows about it. I would appreciate if some one give me some info on this.

Here is the question:

1. Is it possible to carry both long and short position in future account?


So far this is some of the info that I got>
1. Govt. regulation prohitbit you do that.
2. It is possible if there are different month contract, but not the same contract.
3. No it is not possible, you would have to open 2 accounts, one for long, one for short. This is from Tradestation brokerage.
4.Govt regulation prohitbit you to carry long and short in different account in same brokerage. But on the same account it is OK, becase they cancel each others.

As you can see, some of the answers contradict each other, of course it could be just brokerage specific. I do not know. So can some one clear this for me.
 
Another question is why? If it's the same position, it's pointless. For example, if you are long sep beans and short sep beans at the same time, you are flat, and will make exactly the same thing on one side as you lose on the other (except you will lose the commissions), so there is no point. If you are talking about holding both puts and calls, that is perfectly legal, whether in the same account or different ones. If you are talking about different months, that is fine too, that's just a calender spread.
Jessie
 
reason for both long and short in one account. It is base on different strategy. One for trend following and the other for shorter term time frame. I then find it necessary to carry both long and short positoin over night some time. I then find out this issue.

Some people find it pointless to have both long and short together. But I am looking from strategy point of view and just like to get this clear.
 
I see what you are saying, but you are still not carrying (net) both long and short positions simultaneously overnight. If you are long in one account with one strategy, and short in either the same or a different account at the same time with a different strategy, you are net flat, and will neither profit nor lose from either or both accounts or strategies, and the net result is exactly the same as having no position at all. Why not just look at both strategies, and see what the combined net position would be at any given time for both, and trade that position? That is how multiple strategy arbitrage firms do it, and if nothing else, it would likely reduce your transaction costs.
Jessie
 
Jessie, I see what you mean. thanks for the advice

Spreadem, I am current using TradeStation. TS do not allow one account dose all approach. You will have to open 2 accounts: one for stock and one for future. Thinking switch to IB for this reason.
 
Of course you can do it in one account, but your account will be flat and your statement will show no positions, instead of showing one long and one short. But if you wanted to close one of the system trades, then you would automatically be right back where you started. For ex, you are long one ES, your second system says go short ES. Now you are flat. Your second system says cover short, when you execute that trade you will be long again.
 
So IB will let you have a long position and short position simultaneously in the same equity??

Cyber will not - and have explained it's against SEC regs.

Thanks,

Swish
 
Quote from Swish:

So IB will let you have a long position and short position simultaneously in the same equity??
More...

No IB won't. They will offset.
 
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