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Dear All,
Kindly help me out with this problem !
Suppose I am long on a particular stock and have placed a SL as per the rules. But next day market opens gap down far below my stop loss. Rather stopped out at SL of 3%, I lose more than 15% on that trades.
Should I just hedge my trade on result days or look for more difficult option stategies to protect from such big loss.
Kindly suggest !
Regards
Hi Harpreet,
A few times on strong days I've heard Al say if he believes the next day will open higher he buys a call before EOD and exits it quickly on the open next day, instead of holding the futures contracts. So maybe simple hedging like you mention is ok but also why not just do the option only and hold that instead of the stock?
I'm not an options trader and have minimal knowledge of them but it's an interesting topic. Hopefully someone who uses options frequently can add more insights here.
Thank you Mr. Carpet. It makes sense to buy options EOD as a better alternative to hedging.
Appreciate your help always 😊
Regards
I remember that AL talked about it somewhere in the video course but I exactly did not know in which video he talked about. Thank you very much for sharing the link of that video.
Regards
Here is an excerpt of Al wishing he bought some calls at the close:
"I really wish that the options market closed at the same time as the E-Mini. Because I would've bought calls here [mouse around (A) area]. I would not have bought here [mouse around (B) area]. A lot of times when you get an overdone close on the E-Mini ... it would be nice to be able to buy calls." - Jan 4, 2011 webinar.
Thank you Mr. Carpet 😊
Regards
