ES Journal - 2013
- Thread starter Trvlwanderer
- Start date
Quote from Visaria:
Hope u r feeling better
When you buy call options to hedge against your short position, does that mean you have no stop loss on the short position? Also, how detrimental is the effect of the cost of the option?
I know you didn't ask me...but...the call option IS the stop loss, so I go short @ 1634 ...buy a weekly say 1650 , that is my stop loss if ES closes above that on Fri my short is covered. You have to go out pretty far to buy a cheap option and if it does get covered by Fri then you have a realized loss which won't be pretty. For myself that call option is more of a catastrophic type of stop loss. I'll open and close (hopefully profitably) several times before Fri.
Hi all. Trading ES for a while. New to thread. Pain trade is up.
FYI. Covered this am on the fake out down. If war breaks out we could spike----counterintuitive but that is the pain trade. Skewer the shorts at the support line as drawn by other posters above. Then I see as the shorts get cleared out another move down. But I do not know when that'll be.
FYI. Covered this am on the fake out down. If war breaks out we could spike----counterintuitive but that is the pain trade. Skewer the shorts at the support line as drawn by other posters above. Then I see as the shorts get cleared out another move down. But I do not know when that'll be.
Just to throw it out there and not trying to state the obvious, but for those not as familiar with options, short ES + long ES call = long ES put. One could be in the synthetically equivalent position and save on commissions by just buying the 1650 put. Understand you might have other reasons for choosing to go short + call route.
Exactly...just buying the put for me is more of a longer term trade. When I buy a call or put as a stop then I'm expecting to make several short term(day trades) of the cash. The option I expect (hope) to lose money on since it is basically insurance.