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FT5E

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Posts posted by FT5E

  1. Was backtesting a delta hedge strategy just now, so long FTSE future on 2nd jan at 7510 {open price} on 20 th jan it hits 7620, the corresponding 7500 put was trading at premium of approx 80. Go long that put. At 31st jan that put hit a high of 350, now your future is down, but the put would have hit some nice bank. 

    any views appreciated

    • Great! 1
  2. 7 minutes ago, cheviot said:

    Yes that will work , except you ve given away some profit on your long position....There s no such thing as a free lunch.....

    There are a multitude of option strategies ....collars/ costless collars strangles, straddles  hedges  all sorts..,,,  

    Option traders use Black Scholes model for pricing options.,,,,

     

    long Straddle on the FTSE would have worked a charm today virtually 100 point round trip from the open

    • Like 1
  3. Surely the best way to play options on IG is some kind of delta hedging strategy. I guess if you have a long future in profit, instead of using a stop loss, buy a put for the same strike price as your entry level and hedge it that way? Any views?

    • Like 1
  4. traded the daily FTSE option today instead of the DFB and to be honest the spread on the option for a daily is too wide. Plus the option price movement lagged the index considerably. Advantage I liked was limited drain on your funds and you know how much you will lose

    • Thought provoking 1
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