Instead of exiting "the losing position" why not paper trade both long and short positions and then when a certain level has been reached enter a real trade in that direction - short or long.
Understanding futures options
- Thread starter masterm1ne
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Instead of exiting "the losing position" why not paper trade both long and short positions and then when a certain level has been reached enter a real trade in that direction - short or long.
How is that the same as going long at one price, shorting later, then exiting the short if the market keeps going up?
I interpreted your post as entering a long and short position at the same time (simultaneously), then closing the losing leg and let the winner run. Is that what you had in mind?
If so there is no reason to enter that trade at all. Why not just enter a short OR long position at a certain point below OR above the current level? Keep note of where that entry could be (paper trade), then enter either a long OR short position.
Today is another example...
No one has an answer to how to do this? I guess I'll just fund another futures account?
The main point is executing 2 different trades at different times, and scratching the loser. I don't want to have to mess with the winning position.
No one has an answer to how to do this? I guess I'll just fund another futures account?
The main point is executing 2 different trades at different times, and scratching the loser. I don't want to have to mess with the winning position.
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Buy put and a call options. Your long gamma and volatility. Close the loosing position when there is a breakout.
If you buy short term options, most of your loss will be in the move so execution is not that critical. However, you can also have stops in place by calculating the option price before the move by using an options calculator.
If you buy short term options, most of your loss will be in the move so execution is not that critical. However, you can also have stops in place by calculating the option price before the move by using an options calculator.
Ok, so that makes sense, but how do I pick the strike if I don't know where price will go...?
I don't have to do that trading futures!
I don't have to do that trading futures!
You are still essentially trading the underlying. You should can apply your TP and SL methods to the options based on underlying price.
Use an options calculator to figure out the theoretical options price at a specific underlying value or just take what the option bid/ask gives you when you TP or SL is met.
However, do understand that by having your cake and eating it by trading both sides of the market will produce an incredible drag on performance even if your strategy produces a reliable profit.
Use an options calculator to figure out the theoretical options price at a specific underlying value or just take what the option bid/ask gives you when you TP or SL is met.
However, do understand that by having your cake and eating it by trading both sides of the market will produce an incredible drag on performance even if your strategy produces a reliable profit.