LONG and SHORT for same script.

[Jatin.great]

On lighter side , the strategy outlined by the poster above was a great strategy which many told me when we were in the era of no margins,no M to M etc....it goes like this....open 1000 ICICI long at broker A and 1000 ICICI short at Broker B.....now if the market goes uo Rs 50/- square off your long position and take payout of Rs 50,000 from broker A.....and dont show your face to broker B till the prices come below the level you shorted.....dont answer his phone calls...and once price comes below your shorting price, cover and tell him " sorry boss, has to go out of town for some work" .

But the above virtual sure profit strategy has stopped working ever since Stock Exchanges and SEBI started margins and M to M .....no one likes traders making money.....

Just kidding...dont try this strategy.... it is not a fair practice and it wont work in current environments...

Smart_trade

Lolzzz. Tat was really funny.

I am still in learning stage and trying to figure out various strategy for Option trading and finally got comfortable with 'Pair Trading' so jus concentrating on it. Btw i want to do trading without using any signalling system.

 

[vssoma]

dear,
my broker allows to open both buy and short positions in any same stock/future

they have 2 types of orders. one is MIS(intra) and another is NORMAL(delivery)

so we can buy and short in same script.

 

[4xpipcounter]

Excellent, Smartrade!
No need to enter a mark if you don't have some relative certainty it is going to move in your way. Yet if you are looking at the market and you have a clear indication it is going in one defined way, then enter it according to your rules for that trade.
OTOH, if the market is in the middle of something, you don't know which way it is going to go, then why jump in with a hedge just to take a position on it?
There are good usages for a hedge. My experience has seen that new people when they use it have gotten into nothing but trouble with it. After all, once you enter a hedge, you're married to it until you are able to close both sides of it.

Why do all that ? consider in your mind that you are long and short in same scrip....and when you get a buy signal , just buy ICICI....work out with examples....it will give you same profits/ loss as the long/short you have in mind....plus you willl pay less brokerage and slippage,STT,taxes etc.

Smart_trade

 

[4xpipcounter]

Jatin, try trading your hedge strategy on a demo platform. If it reaps good benefits over several months, then you might be on to something. I wouldn't start out with real money experimenting with it.

Lolzzz. Tat was really funny.

I am still in learning stage and trying to figure out various strategy for Option trading and finally got comfortable with 'Pair Trading' so jus concentrating on it. Btw i want to do trading without using any signalling system.

 

[sanjosedesi]

Suppose your first pair is Long X and short ICICI....so you do the trade.....now your position with your broker is + X and - ICICI.....

Second pair is Long ICICI and short Y......so you do that trade too.....now your position with your broker is Long X and Short Y ( ICICI is squared off ) .....so if you are doing both pairs simultanously, might as well do Long X and short Y pair as synthetic trade....but if talking trades at different time...then this is very much possible...

ST, thanks. Got some ideas for future reference.
At the same time, agree with 4X, that Jatin should do some paper trading before trying this for real. What you have articulated is what I would call as an advanced pair, and he should first figure out regular trades + pairs and then can move on to the double pair.