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Hedging

Gold - The IcebergFX:XAUUSD Weekly Analysis - Recommended to Sell then Buy for Next Month Potential Bullish Shark Pattern AC 1.13-1.618 XD 0.886 Potential Bearish ABCD 1.618 Support and Resistance Levels Moving Averages Fibonacci Retracement Levels Hedging Strategies This is an adjustment from the previous Weekly analysis. The Money Journey - Hope for the best and prepare for the worst. Press the Like's button (Min +10) to get an important update analysis and let's Reach Your Dreams by Following My Journey's.
FX:XAUUSD
by EchoLAB
EDUCATION: TIPS: MANAGING THE TESTED NONDIRECTIONALUnless you've been buried under a rock somewhere, you'll know that we've experienced a big, broad market move from the late December "Dump Everything, Including the Kitchen Sink" lows at SPY 234 to where we finished Friday. If you were bullish assumption directional in virtually any broad market instrument or exchange-traded fund at or near those late December/early January lows, well, you're feeling pretty awesome here. However, if you went nondirectional at those same lows (short strangle, short straddle) in light of the high volatility environment that existed at that point in time, you may be struggling with call side test and have your share of inverteds on. With that in mind, here are a few tips for managing tested nondirectionals, particularly short strangles and short straddles. 1. Don't Panic/Take Time To Manage The Setup Thoughtfully. If you've been selling short strangles or straddles for any period of time, you'll know that markets move. You can't have a perfectly delta balanced setup all the time, and you probably shouldn't try to keep things that way. Constantly going for delta neutral costs you fees and commissions at the very least and subjects you to potential whipsaw if you're too aggressive. Take a deep breath, close your phone's trading app, and look at the setup again when you've got sufficient time to evaluate what you should do, which should include looking at all your options (rolling the untested side up, rolling the whole setup out, adding needed delta via an additional setup,* or a combination of those). 2. Stay Mechanical As To "When." I generally have a few rules as to when something must be done with a broken setup: (a) A side is approaching worthless (<.05). (b) There is ex-divvy assignment risk. (c) Time is simply running out. All other times are basically "non-must" times when you probably should just hand sit on the setup and attempt to allow the probabilities to work out without intervention. I would note that hand sitting patiently for one of these "must do" points in time is the hardest thing to do in practice, but probably gives better results than constantly fiddling with the setup. (I tend to be a fiddler, so I can speak from experience). 3. Stay Mechanical As To "Where." Intraexpiry Rolls: My general rule on intraexpiry rolls is to roll the untested side toward current price to a strike that will cut net delta position in half where there is side test or the side to be rolled is approaching worthless, assuming that doing that will be productive from a credit received standpoint. For example, if the position's net delta has skewed out to -50, look to roll the untested side to a strike that will reduce that net to =25. As a possible alternative rule, roll the untested to the 30 delta strike; it won't necessarily cut your net delta in half, but it's also a good mechanical rule. If an intraexpiry roll won't be productive (<.25 is kind of my cut off), look to roll out for duration. Rolling For Duration: I generally look to roll the tested side "as is" and the untested to the 30 delta strike. 4. Be Familiar With "Inversion Math." If either an intraexpiry/duration roll results in an inverted setup, keep in mind that the number of strikes the strangle is inverted must be subtracted from total credits received to determine your max profit potential in the inverted. For example, if you received 2.00 for a short strangle and rolled for a 1.00 credit to an inverted that is 2 dollars wide, the max profit potential of that setup isn't 3.00 (total credits received); it's the total credits received minus the width of the inversion: 3.00 (total credits received) - 2.00 (inversion width) = 1.00. Your scratch point is still 3.00, but you won't be able to get out of that setup for less than 1.00 max, so there's no point in shooting for 1.50, for example. Conversely, rigorously attempt to avoid rolling to an inversion that is wider than total credits received, since you won't be able to exit that setup at your scratch point profitably. 5. Look to Bail On Inversions At Scratch. Broken setup risk is generally not centered, the probability of profit is lower than an original setup, max profit potential generally isn't ideal as a function of how much buying power a broken is tying up, and there is there is random assignment risk, depending how deep in the money the tested side is. A scratch is always better than a loser. 6. Keep Track As You Go. Regardless of which type of roll you do, keep track of total credits received as you do each one. Going back through your platform or brokerage statement to look at what you received in credits adds work to the basic scratch calculation process and can lead to addition/subtraction errors as to where your scratch point lies. I have a spread sheet for active trades to avoid doofy addition errors. Aside from calculating short strangle scratch points, it's just a good habit to have a spreadsheet, particularly with things like covered calls, where you can work positions over several months, if not years, of time. * -- Getting required delta via a separate setup (short calls, short call verticals, downward put diagonals, short skewed strangles/straddles for short delta; short puts, short put verticals, upward call diagonals, long skewed strangles/straddles for long delta) is also something that you can do to delta balance, but it naturally adds its own risk.
AMEX:SPYEducation
by NaughtyPines
2
Silver | Cyclical Bear Market for 2019Silver may push off resistance around $15.60 back into consolidation with support at $13.65. If support is breached on the weekly timeframe, this market may finally capitulate with a target of $10.35. Remember, this market has been in a cyclical bear since 2013 on the weekly and lower, and the EMA50 may cross below the EMA200 this year on the monthly: ***This is not investment advice and is simply an educational analysis of the market and/or pair. By reading this post you acknowledge that you will use the information here at YOUR OWN RISK
FX:XAGUSDShort
by Trader6127
Visualizing the Bitmex ArbitrageA handy trick for visualizing the arbitrage opportunity between Bitmex quarterly futures and spot is to input the equasion (XBTZ18-XBTUSD)/XBTUSD*100 into Tradingview. (You can substitute XBTZ18 for another quarterly symbol). I believe all account types can view this on the Daily resolution. Unfortunately historic data for all past quarterly futures contracts are not available for comparison but in the past the spread has become quite large and attractive for a "Cash and Carry" trade. At the high of 2017 the quarterly futures traded at an extreme of 21% premium. Shorting the quarterly futures when there is a positive premium at 1:1 leverage creates a virtual "stablecoin". If the value of Bitcoin goes up the short position goes down but at the same rate thus the nominal value of holdings remains the same. The inverse is true in a bearish market. As expiration approaches the two instruments will come to settle at parity meaning the premium received when the trade was entered will be realized. Not accounting for exchange default this is essentially a riskless trade. The risk profile does NOT work to the upside as if one is in a long futures position not only does the trade lose value but also the value of Bitcoin itself; losses are compounded. This trade is best used as a hedge and situational arbitrage.
X
by norok
Gulf Coast Jet Fuel FuturesProposed EW count for Gulf Coast Jet Fuel Futures: Box denotes the wave travel of the minuette wave (I am not careful about using the correct EW notations) travel. I was tempted to label that as inermediate wave (3) but it would be the shortest wave and that wouldn't stack up. I would be looking for wave C to possibly make a 1:1 or 1:1.618 extension for sub-wave (c). If price is held by the approx trend-line then an extension of wave (5) is still in play, If the trend-line doesn't hold this would validate the count and point towards a retracement of the 5 wave move (no targets as yet - although $1.55 seems like a plausible initial target).
NYMEX:AGE1!Short
by flyinkiwi10
Optimizing Profits for BTC by Hedging!What's up everyone. Quick update for BTC. So, I'm still in my Short from above when I tracked the Rising Wedge + Bearish Butterfly, and because that position is in profits with plenty of play room, I've decided to keep the position open to absorb the capped out funding in a few hours + double-down on futures (or alternative account) to hedge into a long position to get ready for the trend reversal. DO NOT GET TRAPPED BY THE FUNDING!!!! Funding is capped for Shorts, however there are a lot of indicators pointing towards bullishness, including a local double-bottom, 1D StochRSI, 4H Stoch, 1H Stoch, 15M Stoch as well as a Falling Wedge that was already confirmed, Ichimoku Clouds + we already got very close to the 0.5 Fib Level on this retracement we had today. All of this + the high funding looks like a set trap to get some juice for a short squeeze. My strategy for this is to stay neutral and practice risk management for optimum profits with this funding opportunity. Stay frosty. -Wolfie
BITFINEX:BTCUSD
by TheWolfofPoloniex
5
S&P 500: Hedging against bear market riskThe "S&P 500" started on Wednesday to fill the open gap between March 8 and March 9 (above 2740, below 2751). This is bullish and should lead to a bounce in the next days, thereby taking the "S&P 500" higher again. But in case this bounce fails to keep the market going upwards above 2800, the idea is to hedge against further downside risk with a short placed above the high of March 14, at least while the long from 2651 remains open (see related chart idea below). Short entry: 2785 Stop loss: 2833 Target: 2640 Risk/Reward: 3 The Directional Movement Index (DMI) indicator shows that the downtrend was almost over after March 12, but then instead resumed on March 13 on the "S&P 500". The Directional Movement Index (DMI) indicator didn't cross bullish on the "Dow Jones", a signal which is even more bearish than on the "S&P 500".
SP:SPXShort
by ChartArt
S&P 500: Stormy Daniels days aheadShort-term trend remains bearish despite the recent bounce. "S&P 500" futures ahead of the Wednesday cash open are pointing lower after Trump stepped up trade threats as White House economic advisor Gary Cohn resigns in protest. This increases the risk of volatility, which could cause another decline of the market. Short Entry: 2715 Stop loss: 2772 Target: 2600 Risk/Reward 2 This short functions to hedge the long position from 2651 (see related chart below), which remains open until the stop loss at 2663 gets taken out.
SP:SPXShort
by ChartArt
9
DAL: Removing earnings risk while keeping upside exposure.This post takes over from the previous one (see below), as we propose to take full profits ahead of earnings publication on July 13. The logic is to entirely remove any risk related to earnings disappointment, while keeping full upside exposure. The cost of this strategy will be < 2% (to be put in perspective with the 22.5% we have achieved so far on the long stock position). BUY DAL 21July17 $56 CALLS at $0.96/Share (indicative, as per last close). RISK REWARD If the stock flies, you make money on the call and can optionally convert back into your stock position. If the stock trades down, your hedging strategy would have worked and you might be able to sell OTM puts to offset the call premium. The worst-case scenario is if the stock remains flat: You would have lost your position and your premium.
NYSE:DAL
by HAL9000
PGRE - Potential Upward channel reversal Short trade from $18PGRE is running within an upward channel. If it gets up-to $18 to its upper Channel line, this could be interesting in the short side. As $18 is a major resistance label as well. We think it can reverse from there & can go all the way down to $15 area. * Trade Criteria * Date First Found- February 28, 2017 Pattern/Why- Upward channel reversal & breakout Entry Target Criteria- short between 18.00 and 18.05 Exit Target Criteria- Momentum ($15.20) Stop Loss Criteria- $18.40 Please check back for Trade updates. (Note: Trade update is little delayed here.)
NYSE:PGREShort
by AcornWealthCorp
#TSOT -Alternative Strats #SP500 Index #VIXA long call option in the VIX has been over-crowded for sometime, instead taking a queue with the VIM2017 for June futures was more logical as it has also been over-due for a correction before June'17 expires by the end of the 2nd quarter trading. The motivation has been identified to be a technical Island formation and the fact that a third price swing above 18.00 would be an attempt in line spread over a defined period of time. An alternative Plan B and an arbitrage Hedge is likewise in the making to ensure gains made over the carry-over period from last 4th quarter of 2016 would be protected in the event that such declines would continue to do so unexpectedly. Since we have called the price @2200-2500 for the SP500 Index, which is @2269 to this writing. In the event of a turn around, timing a relatively increase in market volatility will justify this strategic move. This would reflect only a price reversal not necessarily a trend reversal as prices are still well within a major decline.
VLong
by megatrade101