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Offsetting strategy
- Thread starter easyrider
- Start date
Easy, ebner etal:
Here is the definitive contingency. Have a stock(not futures) options account open with a firm other then IB. You need a non IB route as well as a non globex route, and in fact even a non CME route. Keep in mind Friday was not IB's problem but Globex(although IB will have outages as will anyone). Since you don't have a ton of margin money available, QQQ or SPY opts will give you the most hedge for your buck. Lets say your'e short 1 NQ=800QQQ and an outage occurs, you can buy calls(whether in the money or out depends on how much $ you have and time to expiration). You may still wind up short a couple a hundred deltas if you can't afford to buy an adequate amount of primo but at least you'll be pretty much protected. Generally $1500 is more then enough to buy enough calls to be OK.
Here is the definitive contingency. Have a stock(not futures) options account open with a firm other then IB. You need a non IB route as well as a non globex route, and in fact even a non CME route. Keep in mind Friday was not IB's problem but Globex(although IB will have outages as will anyone). Since you don't have a ton of margin money available, QQQ or SPY opts will give you the most hedge for your buck. Lets say your'e short 1 NQ=800QQQ and an outage occurs, you can buy calls(whether in the money or out depends on how much $ you have and time to expiration). You may still wind up short a couple a hundred deltas if you can't afford to buy an adequate amount of primo but at least you'll be pretty much protected. Generally $1500 is more then enough to buy enough calls to be OK.
Pabst
Thats kind of what I was thinking. I could put enough money in my Datek account and cover with 8 QQQ options. But I know nothing about options. I thought I would want to get ATM options since they would move in sync with NQ and I would only be out the commissions. Maybe somebody with some option experience could tell me which would be the best ones to get. Dateks commissions on this would be about $25 so it would be a relatively cheap way to protect myself as long as I didnt lose much on the options.
Thats kind of what I was thinking. I could put enough money in my Datek account and cover with 8 QQQ options. But I know nothing about options. I thought I would want to get ATM options since they would move in sync with NQ and I would only be out the commissions. Maybe somebody with some option experience could tell me which would be the best ones to get. Dateks commissions on this would be about $25 so it would be a relatively cheap way to protect myself as long as I didnt lose much on the options.
I think one thing everyone should be aware of is that it
isn't always that easy to offset a position when your
broker goes down.
When IB went down a few months back I finally got a
backup broker but it doesn't help much in that IB is
often unable to tell you the status of any orders you have
in their system. So you may still be getting filled on
resting orders or you may not.
So you are sometimes unable to determine what is
required to offset your position.
Just something to be aware of, it took IB more than
24 hours last time they went down to report the actual
fills back to me.
isn't always that easy to offset a position when your
broker goes down.
When IB went down a few months back I finally got a
backup broker but it doesn't help much in that IB is
often unable to tell you the status of any orders you have
in their system. So you may still be getting filled on
resting orders or you may not.
So you are sometimes unable to determine what is
required to offset your position.
Just something to be aware of, it took IB more than
24 hours last time they went down to report the actual
fills back to me.
I entered a gold futures order just before the planes hit on 9/11. I did not know for a week and a half what my position was!!! Apparently firemen were wading through tickets left on the exchange floor. Managed to make a small profit in the end, luckily. But if I had a weak heart, I would probably have kicked the bucket!
Just checking out this thread I want to let everyone know that Terra Nova Online now offer's E-mini future trading. If you are looking for a 2nd broker we might be an ideal choice or we are certainly a solid primary choice for many too. If you do have to call in a trade, we won't charge you anything extra. If you call in we can place the trade through our CME route via RealTick or through Globex terminals available on our trade desk. We offer direct trading through RealTick: 8:00am â 4:15am EST and after hours from 4:45 â 8:00pm EST. Now you can trade stocks, options, and futures through us all on the RealTick trading platform.
Michael Garvey
Client Services
Terra Nova Online
Michael Garvey
Client Services
Terra Nova Online