What would you do if..

Baozi

Baozi

..you could at the same time be short and long the exact same contract (same type, strike and tenor)? With the caveat that at the end of the day all double positions are automatically closed.

Just asking for a friend..
 
Baozi said:
..you could at the same time be short and long the exact same contract (same type, strike and tenor)? With the caveat that at the end of the day all double positions are automatically closed.

Just asking for a friend..
More...

I do not know what I would do in the options world, but in the CME futures world I would be very afraid, because that is a wash trade and is very illegal.

Answering for your friend.
 
haha there is no illegal stuff involved.. the market rules here are very different from the US. I just discovered there is this possibility, wondering if it can be exploited in any way that is meaningful for a retail trader, I'm not planning to manipulate the markets..
 
Your friends vision can be accomplished, but they
should use two different accounts for each
direction. Your friend should get acquainted
with the strategy of running spreads using
software for the calculations.
 
yes of course if entered at the same time they cancel each other. I figured I could first wait to see if the long makes money, then close the long and wait for the short to mean revert..
 
Baozi, it does work. You just need at least two accounts.
There's a book on this strategy but I can't remember
the authors name.
 
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