Make sure that you have the ability to trade multiple markets and make sure that you will be alerted to an adverse event if you have trades on when you are not monitoring the market. Be familiar with other trading markets so that you will know what is the appropriate hedge for any possible event.
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
What's the most I can lose?
- Thread starter winter
- Start date
Make sure that you have the ability to trade multiple markets and make sure that you will be alerted to an adverse event if you have trades on when you are not monitoring the market. Be familiar with other trading markets so that you will know what is the appropriate hedge for any possible event.
Do you own your own house? Take a look at your brokers paperwork. You can lose everything. What happens if there is a breakdown at either end of the transmission line? Phone outage, earthquake, fire, terrorist activity, etc. I know people dislike having to prepare for these events, but please take it from me, these things do happen. I have been in the market during several adverse events. If I had not planned for these kinds of emergencies, I would have lost a significant amount of $. Plans should include a secondary broker, emergency phone system, Uniterruptable power supply, plan for hedging your position in case you are cut off from your primary market. In addition, I never trade without a native stop order in the market. Good luck. Steve46
Sure they do and different uses for different people - lots wouldn't know an option if it bit them, but there are a lot of traders who put on some kind of protective disaster hedge based on the ebb and flow of international craziness.Quote from winter:
Thanks - thats what I was looking for and far out of the money options make sense - but do real individual traders really do this?
As far as cost, you should be able to keep cost to a comparatively small % of the # of points you make each month (e.g., if you averaged 50+ points per month per NQ is 5 or less points per month per NQ worth it to fix maximum loss in a disaster scenario).
That you're asking about it at all suggests you're uneasy with an open ended risk. So frame your thinking on the subject around what peace of mind is worth to you.
Good luck.
Thanks for the info. I guess what I'm trying to do is put bounds on that opened ended risk.Quote from ArchAngel:That you're asking about it at all suggests you're uneasy with an open ended risk. So frame your thinking on the subject around what peace of mind is worth to you.[/B]
For instance we know that NQ can't go to zero and for certain events (say a world-wide nuclear war) I couldn't care less about my equity losses...so what I'm trying to figure out is how much hedging is really necessary. I guess I need to research past sudden mark drops in the futures markets to see what typically happens during these events. Does anyone know of a site that lists lock-limit trading or forced market closure days in the last 30 or so years (or anything like that)?
Unless I'm not using the search engine on this site correctly it appears to me that ET was not around during 9/11 - true?