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Genting Sing Last:0.73

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BT

When price GAP UP 10 cents, the short position loses 10 cents as well ?

For today, it falls 15 cents, the short position simply gains 15 cents to cover the losses of Long position ?

BullishTempo ( Date: 12-Nov-2010 18:44) Posted:

You still here?

Waiting for friends to knock off.

Anyway here is the explanation.

1) You have 100 lots of GenSp of long position 1 day before announcement.

2) You hedge 100 lots of GenSp at 4.45pm.

3) Market closes.

4) Next day morning opens at 9am.

5) Price gaps-up 10 cents upon good results.

6) Short position lose money.

7) Long position makes money.

8) Close out short position.

9) Take the ride up for long position.

10) You lose nothing except for commission.

Gaecia ( Date: 12-Nov-2010 18:39) Posted:

There a loophole smwhere also helps to mitigate risk, if u hedge short on cfd before earnings announcement that's typically after lunch break or at mrkt close. If earnings are upbeat, you can't close or cancel the short hedge when mrkt's still closed only when market reopens. When it gaps up the short order will still incur losses that has to be closed out instantly.

this is amazing..... normal cash account 100 lots is too much......u are using CDF account ?

BullishTempo ( Date: 12-Nov-2010 18:44) Posted:

You still here?

Waiting for friends to knock off.

Anyway here is the explanation.

1) You have 100 lots of GenSp of long position 1 day before announcement.

2) You hedge 100 lots of GenSp at 4.45pm.

3) Market closes.

4) Next day morning opens at 9am.

5) Price gaps-up 10 cents upon good results.

6) Short position lose money.

7) Long position makes money.

8) Close out short position.

9) Take the ride up for long position.

10) You lose nothing except for commission.

Gaecia ( Date: 12-Nov-2010 18:39) Posted:

There a loophole smwhere also helps to mitigate risk, if u hedge short on cfd before earnings announcement that's typically after lunch break or at mrkt close. If earnings are upbeat, you can't close or cancel the short hedge when mrkt's still closed only when market reopens. When it gaps up the short order will still incur losses that has to be closed out instantly.

yes, and enjoy your weekend ! relax and get good results.....

eeloon ( Date: 12-Nov-2010 16:55) Posted:

All the best in your exams.

Leinadgnow ( Date: 12-Nov-2010 16:47) Posted:

welcome :D going to study now .. hahaha stupid exams in 2 weeks time.. see you all around!! happy trading and enjoy your weekends.

You still here?

Waiting for friends to knock off.

Anyway here is the explanation.

1) You have 100 lots of GenSp of long position 1 day before announcement.

2) You hedge 100 lots of GenSp at 4.45pm.

3) Market closes.

4) Next day morning opens at 9am.

5) Price gaps-up 10 cents upon good results.

6) Short position lose money.

7) Long position makes money.

8) Close out short position.

9) Take the ride up for long position.

10) You lose nothing except for commission.

Gaecia ( Date: 12-Nov-2010 18:39) Posted:

There a loophole smwhere also helps to mitigate risk, if u hedge short on cfd before earnings announcement that's typically after lunch break or at mrkt close. If earnings are upbeat, you can't close or cancel the short hedge when mrkt's still closed only when market reopens. When it gaps up the short order will still incur losses that has to be closed out instantly.

BullishTempo ( Date: 12-Nov-2010 17:24) Posted:

Hedging a position before announcement date means :

Example :

1) You have 100 lots of GenSp 1 day before announcement, long position.

2) You decide to hedge your position, so you short 100 lots of GenSp.

3) After announcement, close your long or short position depending on results.

typo, althou not also

There a loophole smwhere also helps to mitigate risk, if u hedge short on cfd before earnings announcement that's typically after lunch break or at mrkt close. If earnings are upbeat, you can't close or cancel the short hedge when mrkt's still closed only when market reopens. When it gaps up the short order will still incur losses that has to be closed out instantly.

BullishTempo ( Date: 12-Nov-2010 17:24) Posted:

Hedging a position before announcement date means :

Example :

1) You have 100 lots of GenSp 1 day before announcement, long position.

2) You decide to hedge your position, so you short 100 lots of GenSp.

3) After announcement, close your long or short position depending on results.

BullishTempo ( Date: 12-Nov-2010 17:20) Posted:

LoL no.

Based on what I observed for Wilmar and GenSp.

I believe a safer approach for beginner traders should be as follows :

1) Buy 2 weeks before announcement date for a good stock with anticipated good earnings.

2) This stock should already be in uptrend for at least a month.

3) Sell one day before announcement and lock in your profits.

4) If results beat estimates, buy back after annoucement.

5) If results meet estimates, price will be flat. So no issue.

6) If results fall below estimates, you are safe, since you already exited.

This approach will cut down a lot of risks for beginner traders, especially those who are not used to hedging a position before announcement date.

Fools meant Gar la, sense his tone. ;o since when has Olam been up for red hot sale at 0.775...

icetomato ( Date: 12-Nov-2010 17:27) Posted:

OLAM 0.775!!!!!? Kill me!!!

fools_gold ( Date: 12-Nov-2010 17:25) Posted:

and I lost 19K for closing off half of my position in GSP. Other half, I havent sold yet. Not to mention 100 lots of OLAM which I bought at 0.775 and Im still holding it until now. I will probably sell everything off on Monday and just accept my profits then take a break. What an expensive experience

Good advices.....i keep them in my commandment.....

my recent path for genting sp .......yes i enter two weeks ago,,,,,, but i sold along the way for small profit..... buy again when everybody buying...... tempted to sell when it hit 2.35...... greedy man inside say it should hit 2.38..... alamak....

now holding so much genting sp...... looks like going keep it for next quarter result !!!!!

what a journey....