hedging vs closing position.

[traderjo]

Which kind of hedging the OP is referring to? unless that is clearly defined it is hard to say if it is meaningful or not

I guess what the OP is referring to is perhaps the FX type of Long and Short in same pair same a/c type ( marketed by FX bucket shops) or Same Futures Long and short in diff a/c ( as doing it in same a/c simply means the positions are net against each other"

Hedging can be defined in diff ways can it not?
1) User producer category where there is a need to insure the underlying asset they either have or going to get delivery etc / Agri/ Energy/ Metals/ Currency

2) Pairs trading two Futures like ES/YM or ES/RT/ ES.NQ etc or any other exotic synthetic
IN that case it is sort of hedged position
3) Calender spreads ( Seasonal agri futures or other)
4) Temp hedge to take advantage of temp change in direction ( timing the market)
5) Pure insurance using Options to protect achieved gains

Long term view is LONG so 1 SP to open , then say SP goes 5 points up
but you think it is going to go another down by 2-3 points before going up again +10
so for Short term Short 5 or less ES contracts to take advantage of that

 

[icallgod]

Hedging is overrated in my opinion. The only reason why traders hedge is when the perceive a threat to their position, so they enter an opposite trade just in case the threat persists and turn out to be real.

 

[Overnight]

Hedging is overrated in my opinion. The only reason why traders hedge is when the perceive a threat to their position, so they enter an opposite trade just in case the threat persists and turn out to be real.

You win the ET stupidest comment of the day of the year award, issued every decade.

No shit Sherlock.

 

[murray t turtle]

Hedging is overrated in my opinion. The only reason why traders hedge is when the perceive a threat to their position, so they enter an opposite trade just in case the threat persists and turn out to be real.

%%
Overused for sure. I like what M Steinhardt said ; look @ most of the hedge funds + where is the hedge ??'' LOL

NOT the best time maybe to mention this [summer stocks ]; TX hedge =long everything.
Also defined by Webster as protection, as common stocks are a hedge against inflation.
Came from the old English word related to hawthorn; used a protective/thorny fence/hedge.

A 30 day insurance contract fits the definition;
usually buy 6 months, myself ...............................................................................,