EDIT: DUMPED HEDGE ALSO. Going to sleep and dont want to keep this open. What makes me feel bad about this trade is that the futures buy was almost a perfect entry yesterday but the trade got messed up due to the hedge..I learnt a lesson but will share more over weekend.
Overall a bad trade. Oh well still a good week. The hedges were not properly done on this trade. I know why now but will post this and more thoughts over the weekend. Going flat for the weekend...We will see more next week....
Sheet also updated above. Have a good weekend all...
===================================================================
Later tomorrow I will write more on the hedge and what went wrong. I am also learning and experimenting in this.
Best.
2 comments:
Consider the following,
Your Delta (for Hedge) was 1.10 (which means you over-hedged)
IV was around 57 at time of initiation which dropped down yesterday.
Yesterday, we also saw discount btw Futures and Spot getting reduced.
I feel that for extreme short term, market is still up. If you had held onto position, loss may have been minimized since your Delta for hedge was not 0.70 and a 50 move on Nifty may have given you break-even or small profit.
TI :)
Hey Prashanth...
You are 100% correct!(Almost 3 different reasons played against me at the same time..I saw it happening realtime and just wanted to cut and run on my trades)...I realized this early yesterday even though I did not quantify it as you have over here...And in an effort to correct the mistake, I made some other small mistakes and probably worsened the situation(but small mistakes and so small fees - we gotta pay our dues to MISS MARKET lol)..but again I am not too worried about that...maybe 2 yrs back I would have been very upset...but in the effort to become more professional, I have tried to distance myself from the trades...hmmnn..donno if thats good or bad thing...lol...but you would know more about that! :)
Okay, I do intend to do some post mortem of the markets and mainly my trades over weekend...but in meantime if you have some links I can maybe read on the hedging dilemma(to HEDGE or NOT to HEDGE?) and Deltas, I would really appreciate it..I do know the idea and basic concept from my trading and experience..but I do not know the theory if you know what I mean...
Thanks Prashanth for you comments and time..I appreciate it.
Others also, I would appreciate it if you can offer comments on similar situations you might have faced..or any thoughts at all...
More thoughts and debates tomorrow.
Cheers and have a good weekend all!
Lee
Post a Comment