Sure, so why don't you give us an example of a good hedge?
Why hedge, why not just buy a smaller position?
- Thread starter IronFist
- Start date
Sure, so why don't you give us an example of a good hedge?
If you are trading dislocations and don't want to express a macro view hedging is the only way to stay delta/vol neutral.
I could go into how to slow accelerations...reactive trading styles...bla bla bla...
But IronFist to cut to the chase...
When trading a universe of positions it can be better to use what you suggest. It is much more decisive. I am not endorsing anything as my personal trading is private. But some traders need to find a good fit for how they can do this job.
ES
But IronFist to cut to the chase...
When trading a universe of positions it can be better to use what you suggest. It is much more decisive. I am not endorsing anything as my personal trading is private. But some traders need to find a good fit for how they can do this job.
ES
He's not going to like that. Too many big words.
I agree, I want a TL;DR:
Right. How about if you’re not trading dislocations and you delta is how you make your money?
Well, is it idiosyncratic (name-specific) delta or is it market delta?
Eg. you think S&P500 will rise in value over next few weeks (earnings season or whatever your reason) but dont want exposed risk to all the other shitty factors (eg. trump tweeting shit, NK being a dick), so you enter a spread between S&P500 and Dow/NASDAQ. Therefore if trump tweets shit, both will probably fall in price, but your overall position is "mostly" unchanged (its less changed then if you were outright long)