Long term holding of stock/index futures

[traderjaya]

All,
What do you think of buying futures with the intention of holding for a long time frame , like a month or two?

I'm not interested in day trading and I'm thinking of the advantage of going long or short at my discretion.

please comment.

Regards,
Jaya

 

[jain.er]

You need to have a big hearth to do that i mean in case market takes a plunge against you wud u continue holding or sell off ....vat abt yr stop losses and targets ?

 

[SavantGarde]

If The Market is like the way it has been Choppy & Volatile...... Then the prudent thing for somebody who doesn't have the time to attend to their position on a daily basis....

a) 2 Lots Of Short Position & 1 Lot Of Long Position

b) If There is upward Bias... without a confirmation of the Trend....then 2 Longs & 1 Short

c) If Longer Trend is established.... Then Only Long or Short depending on the Trend....

SG

All,
What do you think of buying futures with the intention of holding for a long time frame , like a month or two?

I'm not interested in day trading and I'm thinking of the advantage of going long or short at my discretion.

please comment.

Regards,
Jaya

 

[timepass]

If one wants to hold for a longer period like say.. 6-9 months, then how to do it without suffering the loss of premium ?? In sell I can understand it. The time decay goes in your favour, but in case of a perceived uptrend ???

 

[SavantGarde]

TP,

Query from Traderjaya was specifically in terms of 'Futures'

With Options it requires.... some amount of homework... where you will be holding CALLs & PUTs of various strike prices..... without having to check the market on a daily basis..... suggest you check some posts in the Mother thread...of a friend 'ANMOL' who does that....

SG

If one wants to hold for a longer period like say.. 6-9 months, then how to do it without suffering the loss of premium ?? In sell I can understand it. The time decay goes in your favour, but in case of a perceived uptrend ???

 

[traderjaya]

If The Market is like the way it has been Choppy & Volatile...... Then the prudent thing for somebody who doesn't have the time to attend to their position on a daily basis....

a) 2 Lots Of Short Position & 1 Lot Of Long Position

b) If There is upward Bias... without a confirmation of the Trend....then 2 Longs & 1 Short

c) If Longer Trend is established.... Then Only Long or Short depending on the Trend....

SG

Dear Savant,

I apologize, but I did not understand why there is 2:1 ratio between long and short and vice versa when the trend is not confirmed?


Regards,
Jaya

 

[SavantGarde]

Hi Jaya,

Don't want to bore you with an endless monolgue......

Best way to understand the concept behind this.... is for you to note the Ratios given earlier... and I shall provide you with the current bias...Which is UP.....that translates into 2 Longs & 1 Short

Based on this.... When the markets open tomorrow.....this is what you can do..

a) If the Market Opens with a Gap Down then you Buy the 2 Longs (Dec. Futures)

b) And Put a Sell Order For 1 Lot Of January Nifty Future at about 20-25 Points Above Your Long Entry.

Please Note: Do Not trade this with real money yet. This exercise is to understand the concept

Thereafter, Track your position for about a 7-10 Days & Let me know your observation.

SG

Dear Savant,

I apologize, but I did not understand why there is 2:1 ratio between long and short and vice versa when the trend is not confirmed?


Regards,
Jaya

 

[SavantGarde]

My apologies ...missed the second scenario... !!!

a) If the Market opens Gap-Up Then You Short 1 Lot Of Dec. Future

b) Similar to the first illustration Keep 2 Lots to Buy January Future at about 20-25 points Below your short Entry.

SG

 

[traderjaya]

Hi Jaya,

Don't want to bore you with an endless monolgue......

Best way to understand the concept behind this.... is for you to note the Ratios given earlier... and I shall provide you with the current bias...Which is UP.....that translates into 2 Longs & 1 Short

Based on this.... When the markets open tomorrow.....this is what you can do..

a) If the Market Opens with a Gap Down then you Buy the 2 Longs (Dec. Futures)

b) And Put a Sell Order For 1 Lot Of January Nifty Future at about 20-25 Points Above Your Long Entry.

Please Note: Do Not trade this with real money yet. This exercise is to understand the concept

Thereafter, Track your position for about a 7-10 Days & Let me know your observation.

SG

Dear Savant,
Should I buy immediately after the opening bell or any time?

Jaya

 

[SavantGarde]

If Nifty Doesn't Start with a Gap Down or Gap Up & If Our Bias is Up Like I mentioned as cue for you.... Then You would keep to....

BUY 2 Lots about 12-15 Points Below The Open
Short 1 Lot about 12-15 Points Above The Open

Do Not Take The Trade With Real Money Till You are comfortable with the Strategy....& it may require your personal tweaking to suit your temperament....

SG

Dear Savant,
Should I buy immediately after the opening bell or any time?

Jaya