LD Lossdog Research
topic

hedging

9 matching records.

Trade idea

HG Hedging

The speaker suggests that copper may offer more upside potential compared to other metals like silver, which are perceived as overbought. However, the speaker cautions that hedging with copper is not a guaranteed strategy and depends on the context of the trade. If the goal is to keep the position open for hedging purposes, copper could be considered, but if the trade can be exited, it's better to do so. The speaker also notes that the relationship between silver, gold, and copper as hedges is not well-defined and may not be reliable.

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StrategyHedging
Assetcommodity
Time horizonShort-term
Entry / triggerIf the trader is short silver and wants to hedge the position, buying copper contracts could be considered as a hedge.
Target / exitThe speaker suggests that copper has more room to the upside compared to other metals, but the exact target is not specified.
Invalidation / stopThe speaker warns that if the trade can be exited, it's better to do so, implying that the trade may be invalid if the market moves against the hedge.
SpeakerScott Sheridan
Risks
  • The effectiveness of copper as a hedge is uncertain
  • The market conditions are volatile and unpredictable
  • The speaker has no personal experience with copper trading
longcommoditylongHGshort-termhedging
medium confidenceVerify in video at 07:43 ↗
Q&A

What is your approach to a physical hedging portfolio?

The speaker explains that for a purely physical hedging portfolio, futures or futures options must be used. This is because the physical commodity is tied to specific futures expiration cycles. The speaker also mentions that over-the-counter markets can be used but are niche and require specific counterparties.

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Actionable takeawayUse futures or futures options for physical hedging portfolios due to their direct correlation with specific commodity expiration cycles.
hedging
high confidenceVerify in video at 28:29 ↗
Q&A

Am I thinking like a reasonable person by buying copper contracts to hedge my short silver trade?

The speaker suggests that buying copper contracts as a hedge for a short silver trade may not be a reasonable strategy. The speaker warns that if the trade can be exited, it's better to do so, implying that the trade may be invalid if the market moves against the hedge. The speaker also notes that the relationship between silver, gold, and copper as hedges is not well-defined and may not be reliable.

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Actionable takeawayThe speaker advises against using copper as a hedge for a short silver trade unless the trade is kept open for hedging purposes. The speaker also warns that the effectiveness of copper as a hedge is uncertain.
HGhedging
medium confidenceVerify in video at 07:43 ↗
Q&A

Can buying VIX calls help hedge against a market correction or crash?

Buying VIX calls is not recommended as a hedge for iron condors due to the high cost of VIX premiums and the difficulty in timing the market. Instead, skewing the iron condor with a small amount of negative delta provides better protection at a lower cost.

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Actionable takeawaySkewing iron condors with negative delta is a more effective and cost-efficient hedge than buying VIX calls.
hedgingrisk management
high confidenceVerify in video at 00:38 ↗
Q&A

Is there any way to defend a short position in silver other than just tapping out?

The speaker discussed the challenges of hedging a short position in silver, noting that gold only hedged 15-20% of the losses. The speaker also mentioned that they tried to hedge with gold but found it ineffective.

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Actionable takeawayHedging a short position in silver with gold may not be effective, as demonstrated by the speaker's experience.
SILgoldhedging
high confidenceVerify in video at 39:15 ↗
Q&A

Is hedging a necessary strategy for all traders?

Hedging is not a universal necessity for all traders. It depends on individual trading styles, market conditions, and personal risk tolerance. The speaker suggests that hedging should be used strategically, similar to how a NASCAR driver might use brakes in certain situations.

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Actionable takeawayHedging should be considered as a strategic tool rather than a mandatory practice.
hedgingtrading strategy
high confidenceVerify in video at 55:35 ↗
Q&A

What would a position be if you're hedging?

The speaker explains that hedging involves strategies like selling a call or a put, which do not add capital. However, the speaker is opposed to adding capital to positions and prefers reducing trade size as a more effective hedging method.

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Actionable takeawayHedging can be done through strategies like selling calls or puts without adding capital, but reducing trade size is preferred for risk management.
hedgingposition sizing
high confidenceVerify in video at 1:01:45 ↗
Q&A

What is the recommended approach for scalping?

The speaker advises against hedging or spreading off a losing scalp trade. Instead, a scalp trade should be treated as a standalone position, and one should either take profit or accept the loss without attempting to hedge or spread off the losing scalp. This approach prevents confusion and potential worsening of the situation.

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Actionable takeawayAvoid hedging with losing scalp trades; treat each scalp trade as a standalone position.
hedging
high confidenceVerify in video at 1:24:54 ↗
Q&A

How can I hedge my crypto position?

The speaker suggests that hedging crypto positions may involve strategies such as short strangles in precious metals, but the effectiveness of such strategies depends on market conditions and the trader's ability to identify false rallies.

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Actionable takeawayConsider using options strategies like short strangles in related assets to hedge crypto positions, but be cautious of market volatility and the risk of false rallies.
hedging
high confidenceVerify in video at 00:02 ↗