Hi All, Need some suggestions.
I am a pretty exp trader in futures , and presently carrying a lot of long positions in the futures segment.
As you all know tomorrows FOMC meet is critical to the future direction of the markets. I am holding these positions as i personally believe there is a high chance that Fed will announce QE 3 .
But since to survive we cannot depend on chance & luck , we cannot take chances. So thinking of hedging my longs .
Since i havent used hedging in my trades, i need suggestions , i have a few options with me :
a) Buy ITM Nifty Puts
b) Buy OTM Nifty puts.
c) Short some select stock futures which i am bearish on .
what my intention is in case Fed announces QE3 tomm or day after , i should be able to square off my puts at breakeven, as loss in delta, should me made up by gain in vega.
But in case QE doesnt come and markets gap down , the gains in my hedge should be able to cover the loss in my long portfolio.
This hedging should be done before market closes tomm.I am sure there are many traders expert in options and hedging, request them to please advice me.
Thanks.
I am a pretty exp trader in futures , and presently carrying a lot of long positions in the futures segment.
As you all know tomorrows FOMC meet is critical to the future direction of the markets. I am holding these positions as i personally believe there is a high chance that Fed will announce QE 3 .
But since to survive we cannot depend on chance & luck , we cannot take chances. So thinking of hedging my longs .
Since i havent used hedging in my trades, i need suggestions , i have a few options with me :
a) Buy ITM Nifty Puts
b) Buy OTM Nifty puts.
c) Short some select stock futures which i am bearish on .
what my intention is in case Fed announces QE3 tomm or day after , i should be able to square off my puts at breakeven, as loss in delta, should me made up by gain in vega.
But in case QE doesnt come and markets gap down , the gains in my hedge should be able to cover the loss in my long portfolio.
This hedging should be done before market closes tomm.I am sure there are many traders expert in options and hedging, request them to please advice me.
Thanks.