Trdrmac,
Would you give an example of the funds and stocks you might typically set up along with the IWO and perhaps a sample ratio of these three components.
Geo.
Concurrent long and short same security?
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Trdrmac,
Would you give an example of the funds and stocks you might typically set up along with the IWO and perhaps a sample ratio of these three components.
Geo.
It is legal to be long and short at the same time however the only reason to have this position would be to sell the long position on a down tick and that is illegal. If you become net short by selling any or all of your long side on a down tick you are breaking the law. I actually called the sec and talked with one of their attorneys to discuss this strategy. There was no way to make it work. SSFs are what you want. Good luck ...... Nas
Note: Long and short position also used to defer tax on profitable position (Shorting against the box)
Note: Long and short position also used to defer tax on profitable position (Shorting against the box)
You always leg-in, taking the short position first. Think of it as a cheap bullet. You obviously have to have the position setup in advance.
For example, you anticipate a bearish news play on a stock. So you find a good time to leg-in to the position across two accounts before the news release. When news hits, if it's a bullet play, well, lift the long leg.
And it's illegal, but you may never get caught...
billp
watching "This Old House Classics" and popped up this thread reminded me of another "Classic" trade relative to your question. My idea was using futures, before the electronic age of futures computer order entry and exit. READ using the telephone. HA
This was what i called "banging meats". back in like 1990 or so meats traded in relatively small ranges (maybe they still do, have not looked because now i simply trade the ES), anyway there were numerous contracts to "BANG" away at as the prices flipped flopped between the ranges. ( fats, feeders in cattle...........hogs and pork bellies..........plus some of the contracts could be gamed not only in front month but also in next car as long as there was some vol, well you know, as long as they were liquid in and out. That was not a problem for me because i was not trading size, i was just interested in playing marbles and filling up the bag as the day progressed.
Here is how it worked: I opened 2 accounts with Ira Epstein futures, 2 different account numbers.
Go long in LC in one and short LC in the other for front month. Do the same in next month and maybe even in a further out car. thats a possible 6 trades just in LC alone. Then throw in feeders, thin enough to use front months only in most cases. Throw in LH for a couple months, then throw in the front month in PB. Now you are ready for action...
Now remember this was all with a telephone and live quotes from the little portable Quotrek from that company in Menlo Park, Ca, whatever there name was.
Ok, you get the idea, short many, long in same cars in the other acct. Now just play the ranges (remember this also, commissions were not real cheap then as they are now). When there was a certain amount of profit in any car on either side i would yank it (leaving a loss on the other side), then immediately hedge the loss when the other side of the loss side reached the ranges other side in attempt to work off the loss to preserve the taken profits. Get the picture? Sure, it was quite fast and furious some times, BUT, IT WORKED. Say you banged out 2k in profits and have worked the losers back 1/2 way and accounted for commissions also. since you were basically hedged most of the time you could carry overnight or just take what losses remained and got flat.
OK, end of story, this worked for a long time (took intense concentration, etc so it was WORK. Now for the kicker why i dropped the idea and moved to pure direction trading.
I had a 1k profit in LC over the hedge and was going to take it and go flat for a vacation. I called the desk at #1 and said: Sell LC to cover, mkt., i will hold. ...BOOM i was out. ..called #2 and said BUY LC to cover mkt, i will hold.............(taking much longer than usual on hold), the guy comes back on phone and says "you are long LC, do you want to BUY more? I said in this account i am short not long. He said, "no you are long". I said, go back and review your tape, i will hold.
he insisted the tape said i was LONG, i said, OK get me flat and send me a copy of the tape, i will hold.
He got me out (and STOLE a thousand dollars) and came back on and said "my boss said if you want a copy of the tape we will need a subpoena. .....
I said well in the mean time close out both accounts ans send me ny monies. No more IRA. they saw i was making money and took a piece of the action.
It was fun and i learned a lot, good and bad. Good trading to you. Todays order entry and exit is a dream compared to old days. LOL
watching "This Old House Classics" and popped up this thread reminded me of another "Classic" trade relative to your question. My idea was using futures, before the electronic age of futures computer order entry and exit. READ using the telephone. HA
This was what i called "banging meats". back in like 1990 or so meats traded in relatively small ranges (maybe they still do, have not looked because now i simply trade the ES), anyway there were numerous contracts to "BANG" away at as the prices flipped flopped between the ranges. ( fats, feeders in cattle...........hogs and pork bellies..........plus some of the contracts could be gamed not only in front month but also in next car as long as there was some vol, well you know, as long as they were liquid in and out. That was not a problem for me because i was not trading size, i was just interested in playing marbles and filling up the bag as the day progressed.
Here is how it worked: I opened 2 accounts with Ira Epstein futures, 2 different account numbers.
Go long in LC in one and short LC in the other for front month. Do the same in next month and maybe even in a further out car. thats a possible 6 trades just in LC alone. Then throw in feeders, thin enough to use front months only in most cases. Throw in LH for a couple months, then throw in the front month in PB. Now you are ready for action...
Now remember this was all with a telephone and live quotes from the little portable Quotrek from that company in Menlo Park, Ca, whatever there name was.
Ok, you get the idea, short many, long in same cars in the other acct. Now just play the ranges (remember this also, commissions were not real cheap then as they are now). When there was a certain amount of profit in any car on either side i would yank it (leaving a loss on the other side), then immediately hedge the loss when the other side of the loss side reached the ranges other side in attempt to work off the loss to preserve the taken profits. Get the picture? Sure, it was quite fast and furious some times, BUT, IT WORKED. Say you banged out 2k in profits and have worked the losers back 1/2 way and accounted for commissions also. since you were basically hedged most of the time you could carry overnight or just take what losses remained and got flat.
OK, end of story, this worked for a long time (took intense concentration, etc so it was WORK. Now for the kicker why i dropped the idea and moved to pure direction trading.
I had a 1k profit in LC over the hedge and was going to take it and go flat for a vacation. I called the desk at #1 and said: Sell LC to cover, mkt., i will hold. ...BOOM i was out. ..called #2 and said BUY LC to cover mkt, i will hold.............(taking much longer than usual on hold), the guy comes back on phone and says "you are long LC, do you want to BUY more? I said in this account i am short not long. He said, "no you are long". I said, go back and review your tape, i will hold.
he insisted the tape said i was LONG, i said, OK get me flat and send me a copy of the tape, i will hold.
He got me out (and STOLE a thousand dollars) and came back on and said "my boss said if you want a copy of the tape we will need a subpoena. .....
I said well in the mean time close out both accounts ans send me ny monies. No more IRA. they saw i was making money and took a piece of the action.
It was fun and i learned a lot, good and bad. Good trading to you. Todays order entry and exit is a dream compared to old days. LOL
i'm getting mixed answers on this same q from a variety of well informed sources. still looking for a definitive answer