Sentences with phrase «risk of a short position»

Short selling can be a risky endeavor, but the inherent risk of a short position can be mitigated significantly through the use of options.

Not exact matches

«The epicenter of this turbulence lies in the US, and after the wipe - out of crowded positions on VIX - related ETPs early February, the next big risk is to short positions on S&P 500 variance swaps.»

In short, anything that smells of risk of any sort is being shunned, with much of the only support coming from traders desperately trying to keep prices away from levels where big options positions will be triggered.

Ideally, we were prepared to enter a short position if $ GLD bounced into key resistance of its 50 - day moving average, which would have provided us with a low - risk entry point with a very positive reward - risk ratio.

In «neutral» mode, we can be positioned either long or short, but position size of all new trade entries will be lighter than usual, in order to reduce risk.

Entering a short position while a stock or ETF is still rallying has a very high risk of getting your stop run.

We can't predict the timing of a dollar reversal, but it may not be smooth given that short U.S. dollar positions are the most crowded since September 2017, according to BlackRock's Risk and Quantitative Analysis Team.

The crowding in short - volatility positions is evidence of a broader trend: increased risk taking.

The common element is that any long position taken in a specific equity is offset by a short position in either a merger partner (risk arbitrage), an «overvalued» member of the same sector (long / short paired trading), a convertible bond (convertible arbitrage), a futures contract (index arbitrage) or an option contract (volatility arbitrage).

Balance sheet friendly, supports long and short positions (receive vs. pay), The position can be unwound quickly on - demand Cons: swap spreads risk exposure if the investor wants to hedge instruments correlated with part of the Treasury curve.

Therefore, we're not in a hurry to enter multiple new positions (either long or short) ahead of the holidays, but will still consider new stock and / or ETF trade entries (possibly on the short side and / or inverse ETFs) with reduced share size if an ideal trade setup with a firmly positive reward - risk ratio presents itself.

Rather, my impression is that the problems at JPM may be the result of using highly leveraged, illiquid derivative transactions as a «cross-hedge,» intended to reduce the risk of default in a whole portfolio of complex positions including (but not limited to) European mortgage debt, but with the long and short portions of the position behaving unexpectedly in relation to each other.

If you have long positions balanced by short positions, you mitigate some of the risk that occurs in a turbulent and volatile market.

The second is a positive reinforcement between measured volatility and the effective scale of short - volatility positions that has increased the risk of escalatory market volatility spirals.

I'm currently not involved in this market as the chart structure is terrible as the 10 day low stands at 62.01 as the monetary risk is too high, however, I am certainly not recommending any type of short position as this trend is strong as the fundamental and technical picture remains bullish.

Alternative investing, including use of futures, options and short positions, may involve risks different from or possibly greater than the risks associated with investing directly in securities and other traditional investments.

We as fans, in particular the STH and those who go regularly to away - games, spend a hefty sum of our money on the club, but our financial risks are relatively small compared to Kroenke's: we can chose to no longer spend any money on Arsenal in relatively short time, but Kroenke is in a different position.

The posterior position at birth also is associated with a higher risk of short - term complications for the baby, such as lower five - minute Apgar scores, an greater likelihood of needing to be admitted to the neonatal intensive care unit, and a longer hospital stay.

For weeks, Miner has said the concept offers short - term savings at the risk of worsening the city's long - term financial position.

For example, someone who has long legs and a short torso, poor mobility in his hips and lumbopelvic rhythm is very likely to never set himself or herself into a proper deadlift starting position and will almost always be exposed to a bigger risk of sustaining an injury in comparison to doing a trap bar deadlift, where he / she can keep the torso in a more vertical position which is much more suitable.

Position away, O ye spinners: The good news for all who are not awards voters is that this newer, shorter World — shorter, anyway, in the category of languid movies over two hours — is that it communicates Malick's luminous artistic vision of innocence and loss, wildness and order, risks taken and chances lost, with more clarity than his first cut.

The funds seek to hedge against the negative impact of currency risk by taking short positions in currency forward contracts.

As I have mentioned previously I simply run a nightly scan of Long and Short stock candidates hitting 52 week highs / lows and keep note of these stocks and over the course of the coming days and weeks I look for which stocks keep hitting the parameters of my scans before taking a closer look at the chart, once I see there is a clean smooth trend be it going up or down I then calculate from that afternoons closing price and where the stop loss would need to be positioned on the first day the trade is placed in line with my risk management and then simply wait for the open the following day to open the trade then my system does the rest.

It's definitely not advisable to take an unhedged short position, either by borrowing someone else's share (s) to sell or selling an option (when you sell the option you take the risk), because of the unlimited loss potential described above.

This risk is compounded by the fact that during a short squeeze or buy - in (discussed in more detail in Risks Of Short Selling), the short seller may be forced to cover the short position at an artificially high price that may only be temporary in nashort squeeze or buy - in (discussed in more detail in Risks Of Short Selling), the short seller may be forced to cover the short position at an artificially high price that may only be temporary in naShort Selling), the short seller may be forced to cover the short position at an artificially high price that may only be temporary in nashort seller may be forced to cover the short position at an artificially high price that may only be temporary in nashort position at an artificially high price that may only be temporary in nature.

Picton Mahoney Income Opportunities Fund: This is a relatively conservative hedge fund that uses short positions to partially offset the interest - rate risk of its long positions.

That gives it substantially more credit risk than investment - grade bond funds, but the high - yield short positions moderate some of that risk.

There is little risk of the position incurring runaway losses, unless for some unfathomable reason the trader closes the long call position - leaving the short call position open - and the stock subsequently surges.

That means if you write a call, you'll have to keep a balance in your account to cover the risk associated with the current obligation of the short position.

Investing in commodities indices that are constructed using long or short positions in futures on physical commodities whose value is determined based on the price of the underlying physical commodity plus yield and that trade on public markets that provide adequate liquidity and transparency, with negligible costs and no storage deterioration risk, offer a practical method to gaining commodities exposure and can provide a means for market participants to access the five components of the returns of the asset class.

In my small unique book «The small stock trader» I also had more detailed overview of tens of stock trading mistakes (http://thesmallstocktrader.wordpress.com/2012/06/25/stock-day-trading-mistakessinceserrors-that-cause-90-of-stock-traders-lose-money/): • EGO (thinking you are a walking think tank, not accepting and learning from you mistakes, etc.) • Lack of passion and entering into stock trading with unrealistic expectations about the learning time and performance, without realizing that it often takes 4 - 5 years to learn how it works and that even +50 % annual performance in the long run is very good • Poor self - esteem / self - knowledge • Lack of focus • Not working ward enough and treating your stock trading as a hobby instead of a small business • Lack of knowledge and experience • Trying to imitate others instead of developing your unique stock trading philosophy that suits best to your personality • Listening to others instead of doing your own research • Lack of recordkeeping • Overanalyzing and overcomplicating things (Zen - like simplicity is the key) • Lack of flexibility to adapt to the always / quick - changing stock market • Lack of patience to learn stock trading properly, wait to enter into the positions and let the winners run (inpatience results in overtrading, which in turn results in high transaction costs) • Lack of stock trading plan that defines your goals, entry / exit points, etc. • Lack of risk management rules on stop losses, position sizing, leverage, diversification, etc. • Lack of discipline to stick to your stock trading plan and risk management rules • Getting emotional (fear, greed, hope, revenge, regret, bragging, getting overconfident after big wins, sheep - like crowd - following behavior, etc.) • Not knowing and understanding the competition • Not knowing the catalysts that trigger stock price changes • Averaging down (adding to losers instead of adding to winners) • Putting your stock trading capital in 1 - 2 or more than 6 - 7 stocks instead of diversifying into about 5 stocks • Bottom / top fishing • Not understanding the specifics of short selling • Missing this market / industry / stock connection, the big picture, and only focusing on the specific stocks • Trying to predict the market / economy instead of just listening to it and going against the trend instead of following it

The short positions are not intended to mitigate other factors influencing the price of high yield bonds, such as credit risk, which may have a greater impact than rising or falling interest rates.

Risks associated with derivatives (including «short» derivatives) include losses caused by unexpected market movements (which are potentially unlimited), imperfect correlation between the price of the derivative and the price of the underlying asset, increased investment exposure (which may be considered leverage), the potential inability to terminate or sell derivatives positions, the potential need to sell securities at disadvantageous times to meet margin or segregation requirements, the potential inability to recover margin or other amounts deposited from a counterparty, and the potential failure of the other party to the instrument to meet its obligations.

When the great normalisation finally came (starting with rising risk - free real and nominal long - term rates and rising risk - free nominal short - term rates, and picking up steam with the normalisation of credit risk spreads, starting from the US subprime residential mortgage markets and derivatives based on them), a growing number of these highly leveraged open positions went belly - up.

Instead of opening two short positions of EUR / USD, you could short one EUR / USD and short one GBP / USD which would shield you from some risk and diversify your overall position.

I always take a small position though: unfortunately the mechanics of short selling are such that the risk / reward ratio is not as favorable as taking a long position.

A related problem is that you also don't know yet how many GGC shares you should short to remove most of the market risk from the position.

Among the main risks affecting the funds, ProShares warns of inherent volatility associated with futures markets as well as the risk of holding speculative short positions in the portfolios, which could expose the investor to losses.

A short position in a rising market faces the risk of a margin call.

They've frequently held short positions to hedge market risk and are willing to hold a lot of cash.

For example, if you have a short position, you are at unlimited risk of the position going up in value.

Because of the higher degree of risk involved in short selling, the short seller has to ensure that he or she has always has adequate capital (or «margin») in the account to hold on to the short position.

The short positions are not intended to mitigate credit risk or other factors influencing the price of the bonds, which may have a greater impact than rising or falling interest rates.

Some of those risks include general economic risk, geopolitical risk, commodity - price volatility, counterparty and settlement risk, currency risk, derivatives risk, emerging markets risk, foreign securities risk, high - yield bond exposure, noninvestment - grade bond exposure commonly known as «junk bonds,» index investing risk, industry concentration risk, leveraging risk, market risk, prepayment risk, liquidity risk, real estate investment risk, sector risk, short sales risk, temporary defensive positions, and large cash positions.

The common element is that any long position taken in a specific equity is offset by a short position in either a merger partner (risk arbitrage), an «overvalued» member of the same sector (long / short paired trading), a convertible bond (convertible arbitrage), a futures contract (index arbitrage) or an option contract (volatility arbitrage).

This webinar covers: • Benefits of trading Spreads vs. the underlying futures contract • Utilizing an advanced trading strategy for long and short positions using Spreads • An in - depth look at the technical analysis ingredients required for this strategy • The strategy rules and how to manage your risk on each trade

We've got portfolio managers with professional asset management just taking care of each of those option positions — those shorts for you — managing your net equity position and really making sure that the risk profile of that portfolio is managed on a day - to - day basis.

Thanks to the simultaneous opening of an identical (in terms of dollar value) Long and Short position, the risk of loss due to a sudden sway in the market is fully eliminated.

Stock traders who have been using approaches that assume low - volatility conditions will persist indefinitely (e.g., shorting VIX futures, selling option premium, or simply increasing long position size) need to be prepared for a changing of the market guard — or risk getting crushed when volatility doesn't immediately retreat after its next upward spike.

The potential addition of a small, rebalanced position in a strategy such as Short VIX could act to diminish the risk of underperformance in rising markets, and provides a potentially coherent way to capture two complementary sources of behavioral outperformance.