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Option Hedging Strategies

  • #41
  • Dec 13, 2010 7:04am Dec 13, 2010 7:04am
Quoting moksha
With Saxo however couple of questions arise

1 - Will Saxo recognise that your position is CC or Protected Put and cross margin? If you do this in Equity then CC or PP is a recognized Combo order and double margin is not required

2) Using Saxo FX options means only one market maker! so you are the mercy if Saxo!
Hi Moksha

I'm quite sure that double margin in case of CC/PP is not required as long as price rises, because margin required vs. margin available is continuously being calculated. If price rises in case of a CC, then Your spot position will increase in value as the value of the short call decreases. From the point price reaches the strike of the call then the floating profit/loss should be constant and margin required be constant as well.
I'm not sure about the margin requirements if price goes below Your entry price for the spot position.

Yes, unfortunately the FxOptions market is not as big as the spot market, so in a sense we're in the mercy of the market maker. However I think that the real problem about this are the spreads. I don't think that You will be unable to get out of or roll a position at any time. You just have to pay the spread.
  • #42
  • Dec 13, 2010 7:09am Dec 13, 2010 7:09am
Quoting skoda2008
Late last week I opened my 4 positions for January expiry. Both using my preferred strategy of the sold strangle. I haven't kept any money aside for any extra discretionary trades this time. On Friday both USDCAD & GBPUSD hit their linear regression points, and as there was still 40 days until expiry the premiums were high enough for me to be able to sell above and below at 3 standard deviations. Since then the price of the sold strangles has already dropped by 10 pips on one strangle & 15 pips on the other. That's another little tip, if you sell...
Cool - thanks.
That kind of trading is the perfect fit for me and my temper.
I'll check out the mobile alert.
  • #43
  • Dec 13, 2010 7:49am Dec 13, 2010 7:49am
So is anybody doing MArried Call / Married Put with Saxo?
I don;t know if demo on saxo allows FX options
  • #44
  • Dec 13, 2010 8:32am Dec 13, 2010 8:32am
Quoting moksha
So is anybody doing MArried Call / Married Put with Saxo?
I don;t know if demo on saxo allows FX options
Personally I'm not, but Saxo does allow FX options on the demo. Some of their white label partners don't.

Ikon also works out the margins correctly, offsetting margins from spot & options, but their demo does not have the two accounts linked (in real life it is linked).
  • #45
  • Last Post: Dec 13, 2010 9:19pm Dec 13, 2010 9:19pm
Quoting jameswebb
Hear is a list of my current open positions if you look under the short positions of the pdf file.
Cool portfolio. You're doing good.

James, can You elaborate a bit on the analytical steps You take in Your selection of optimal trade setups?
Are You like Skoda looking at confluence support/resistance, Std. deviations and price action, or how do You find Your trades?

I'm still learning

Cheers and continuous happy trading.
T
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