is it legal to have same contract short and long

[thomfergu]

hi.people i have a question is this legal to have same contract for example ES to have in one acct. short and in another acct. long.i read somewhere that u cant do that on stocks .

 

[Spectra]

Yes its legal. Thats just called hedging.

 

[thomfergu]

i was doing "hedging" Es versus Russell but lately they a bit off so got a bite in the ass . now came with idea to short and go long same contract .i was doing 2 es 1 Russell .thanks for the info .just wanted to make sure that i can do that before calling mine broker .

 

[acerbits]

Quote from thomfergu:

hi.people i have a question is this legal to have same contract for example ES to have in one acct. short and in another acct. long.i read somewhere that u cant do that on stocks .

Altho I could just be a n00b, but why would you want to go long and short on the exact same contract? I'm assuming it's the same and not a spread. the only thing you that will happen is wasted commission fees since the positions are ofsetted.

 

[thomfergu]

for me psychologically this way is better i don't give the damn thing market is up or down it will gap down or up im always in the game and just looking for big reversals either intra day or for a few days.

 

[MajorUrsa]

Quote from thomfergu:

for me psychologically this way is better i don't give the damn thing market is up or down it will gap down or up im always in the game and just looking for big reversals either intra day or for a few days.

Yes of course, but why not close both contracts instead of keeping both open? Whats the (psychological) advantage??

Ursa..

 

[HoustonRemote]

With stocks no matter how many accounts you have anytime you sell stock you don’t have it must be marked short. With futures it doesn't’t matter. You can’t think of it as not having a position and just being net zero. In one account you might scalp based on a strategy such as floor pivots. A second account could be used for trading futures spreads by having two accounts you could put on a spread such as selling ER2 will buying ES. While one account is short however many ER2 contracts another account might be long the same number but you’re scalping one based on pivots and the other is spread based on the differential of the two and not the price of the individual contracts.

 

[rcanfiel]

Quote from MajorUrsa:

Yes of course, but why not close both contracts instead of keeping both open? Whats the (psychological) advantage??

Ursa..

Because some traders think they are more clever by not just closing the stupid position. This is not hedging, it is making things complicated.

 

[Pekelo]

Well, he could be in 2 opposite directions because he is using different timeframes. He is bullish on the hourly chart but sees a little drop on the 5 min and wants to take advantage of it, without getting out of the first position.

Anyway, you can always use different expiration of the SAME future. You are long the Sept contract and short the Dec.....

 

[dieselman8]

Quote from thomfergu:

hi.people i have a question is this legal to have same contract for example ES to have in one acct. short and in another acct. long.i read somewhere that u cant do that on stocks .

Sure. Short 1 ES, long 1 ES. Guess what. You're flat.