Momentum/day trading SPX - Ever try buying opposite direction in order to "freeze" your P/L?

[stockspy456]

I am fairly quite new to trading options, but have found some success, and plenty of failure. Most of the failure I feel is centered around my decisions to close out a position, and immediately buy the opposite direction, if I feel that the direction of the SPX is about to change. But I have been killed by fill prices, and also (and this is mostly what I think my issue is), what usually happens is I make a quick decision to close one position and buy the opposite direction, but ultimately my original position ends up the ultimate winner. But since I had already closed that, I basically miss out on the original trend that I had discovered.

My idea now is, perhaps what could be a more successful strategy for me, is if I simply bought an equal value in the opposite direction without closing my original position. Then, once I really get to see whether a change in trend is occurring or not, I can then decide which position to get rid of. But during the time of owning both sides, my P/L will essentially be "frozen", because as one side goes up, the other goes down.

Maybe this is just a strategy that is better for me, to control my own impulses, as I feel closing out a position is much "easier" than trying to enter/open a new position.

Has anyone ever tried doing this?

 

[cdcaveman]

Just reduce your position size from the start

 

[Handle123]

You need much more knowledge and much less trading. Being "frozen" has costs and fees. If you were to say that you know what trend is for SPX and you want to be short and about to place the trade, how can you control risk? How can you control the RISK? It is called hedging, but you have much study before you knowing which month to use, should you do straight buying or do a spread. Or you were to say you are short SPX and been in it few to several days and you think it will retrace, what should your do? How do you control RISK? It is called hedging Open profits, but you have much study before you knowing which month to use, should you do straight buying or do a spread.

But to be doing offsetting is adding fees cause you lack knowledge and impulsive screams you lack discipline and should not be trading at all. What is the rush to lose your money? It won't be long till you have no money left.

Guess what, you not traded long enough where the opposite will occur where values go from Prem over the Theo Value to Discount, I have not watched SPX enough as I seldom trade them, but in stocks this will happen.

 

[stockspy456]

You need much more knowledge and much less trading. Being "frozen" has costs and fees. If you were to say that you know what trend is for SPX and you want to be short and about to place the trade, how can you control risk? How can you control the RISK? It is called hedging, but you have much study before you knowing which month to use, should you do straight buying or do a spread. Or you were to say you are short SPX and been in it few to several days and you think it will retrace, what should your do? How do you control RISK? It is called hedging Open profits, but you have much study before you knowing which month to use, should you do straight buying or do a spread.

But to be doing offsetting is adding fees cause you lack knowledge and impulsive screams you lack discipline and should not be trading at all. What is the rush to lose your money? It won't be long till you have no money left.

Guess what, you not traded long enough where the opposite will occur where values go from Prem over the Theo Value to Discount, I have not watched SPX enough as I seldom trade them, but in stocks this will happen.

I'm talking about only day trading, and never holding overnight. I have definitely had times where my option goes from premium over the price to discount. But the same thing happens with the opposite direction. This is likely only a "solution" for my impulses, and also for the fact that there is no way to know where the market is going. I suppose it is partially a way of hedging.

 

[stockspy456]

Anyways, I have replayed a few days using this method. TD Ameritrade's thinkorswim application provides you the ability to actually replay previous trading days, and actually make trades using fake money. It's essentially papertrade, but you can pick whatever previous day you want. So far, buying the opposite direction in order to "freeze" my P/L is proving to be more profitable than completely closing one position and opening the other position.

Also, I am not talking about doing like 100 trades a day, just maybe a few times whenever I "think" that I see the trend changing.

 

[Handle123]

I'm talking about only day trading, and never holding overnight. I have definitely had times where my option goes from premium over the price to discount. But the same thing happens with the opposite direction. This is likely only a "solution" for my impulses, and also for the fact that there is no way to know where the market is going. I suppose it is partially a way of hedging.

I use options to day trade but they are for Black Swan and I never get rid of them. I don't know of anyone who pardon my wording "wastes" money as you do for day trading, TD is expensive for day trading for one thing and you showing all of us you lack discipline which will only get worse with real money. Fees often during the course of a year, you have to make 100-200% return to pay for the fees on a $5,000 account. When trading stocks/ETFs and options, will be 4 charges and how much does TD charge? 7,8,9 bucks a trade? So you going to spend $28-36 for one round turn trade!!! And even if you go elsewhere, at $4 bucks it be $16 for every trade, it really adds up.

 

[FSU]

They easiest way to accomplish what you are suggesting is sell or buy S&P 500 emini futures. They will hedge you SPX position with minimal slippage.

 

[CBC]

Buying the same amount turns the trade into a straddle.

 

[userque]

Buying the same amount turns the trade into a straddle.

LOL...wow!...took 8 posts before someone finally told OP what he was actually doing! Now, he can google it and research it further!

 

[stockspy456]

Lol, yeah, I don't need long posts explaining to me that I have to pay fees, and that I lack discipline. I already stated that I'm new to trading, so trolls can exit. I'm here looking to share and compare ideas, knowing that many of my ideas area amateur or completely idiotic.

I don't plan on making 20+ trades per day, but if I make 10 trades, and win, I'm happy to pay the fees. Plus, you can use td's application, but make the actual trades on something less expensive if I wanted to. And yeah, if each trade only yields a small dollar amount, then there's no point. You need to have enough cash available to make day trading make any sense. Obviously, if I were day trading 1 SPY contract at a time, that would be nothing but a loss. But doing 4-6 SPX contracts at a time leaves enough to pay taxes, fees, and make money at the end of the day.

My original post was basically a post looking for a way to hedge my impulses. Buying the opposite direction appears to be a decent way of doing that. I knew about straddles, so I guess that's what I'm doing. I don't know why I wasn't already doing this. Instead, I've been closing positions and opening opposite direction positions, but never just holding both directions. The most basic of basics are sometimes the best.