Hedging ES with MES

Sekiyo · Apr 30, 2020

Hi guys,

If I hedge 1 ES with 10 MES,
Can I get margin call or issues with my broker ?

@AMP_Global

Let's say I have a 10K account,
I am down 10K ES wise but up 10K with MES.

What happens ?

Thanks

gaussian · Apr 30, 2020

Sekiyo said:
I am down 10K ES wise but up 10K with MES.

...what

You are aware they track exactly the same thing right.

Sekiyo · Apr 30, 2020

gaussian said:
...what

You are aware they track exactly the same thing right.

That's why it's used as a perfect hedging combination. Hello ?

If I short 1 ES and Long 10 MES I can't be down 10K ES and up 10K MES.

DevBru · Apr 30, 2020

Sekiyo said:
That's why it's used as a perfect hedging combination. Hello ?
If I short 1 ES and Long 10 MES I can't be down 10K ES and up 10K MES.

But why would you want to do that?

schizo · Apr 30, 2020

Sekiyo said:
Hi guys,

If I hedge 1 ES with 10 MES,
Can I get margin call or issues with my broker ?

@AMP_Global

Let's say I have a 10K account,
I am down 10K ES wise but up 10K with MES.

What happens ?

Thanks

No, since one would wash out the other. But what's the point? Just get out when you can.

BTW you pay more commish for MES. So 10 MES is much more than 1 ES.

Sekiyo · Apr 30, 2020

DevBru said:
But why would you want to do that?

Basically ...
To avoid being taken out by "Noise".
Instead of taking a loss I'd hedge my ES position.

Sekiyo · Apr 30, 2020

schizo said:
No, since one would wash out the other. But what's the point? Just get out when you can.

BTW you pay more commish for MES. So 10 MES is much more than 1 ES.

Alright.
Thanks @schizo

Might try it once or twice.
With a small account it can be interesting.

schizo · Apr 30, 2020

Sekiyo said:
Basically ...
To avoid being taken out by "Noise".
Instead of taking a loss I'd hedge my ES position.

Only when the market is chopping. But when it's strongly trending, this will only mess with your head. Now you really need to time your exit. It's not a good strategy. Just my 2-cents.

DevBru · Apr 30, 2020

Sekiyo said:
Basically ...
To avoid being taken out by "Noise".
Instead of taking a loss I'd hedge my ES position.

Why not get out and re enter at a later stage? This will have the same effect but you save on commission.

Sekiyo · Apr 30, 2020

schizo said:
Only when the market is chopping. But when it's strongly trending, this will only mess with your head. Now you really need to time your exit. It's not a good strategy. Just my 2-cents.

Problem is I am often too early in my entries.
And most of the time the market revert at least to my entry.