Buy/Sell futures
Buy/Sell futures
Regarding only the live trading, no backtesting considerations [life is too short for backtesting ], if I have a 1 contract short position with IB for a future such as the YM [dow mini] for example, and I want to reverse the position, can I just buy 2 contracts or do I have to be conscious of the "sell short" and "buy to cover" keywords or first close the position and then open the new one??
- Marina Pashkova
- Posts: 2758
- Joined: 27 Jul 2007
- Marina Pashkova
- Posts: 2758
- Joined: 27 Jul 2007
Hi,
To arrive at the flat position:
1. If you have a long position you will need to use Sell.
2. If you have a short position you will need to use BuyToCover.
Regarding the earlier question about the reversal: if having 1 contract in the short position you tell the system to 'buy 2 contracts' the resulting position will be 2 contracts in the long position. The logic is as follows: to buy 2 contracts the system will first need to cover the existing short position. This will involve buying 1 contract. As a result 3 contracts will be bought within the same trade (if they were executed separately commission costs would raise).
If you need further explanations please let me know.
To arrive at the flat position:
1. If you have a long position you will need to use Sell.
2. If you have a short position you will need to use BuyToCover.
Regarding the earlier question about the reversal: if having 1 contract in the short position you tell the system to 'buy 2 contracts' the resulting position will be 2 contracts in the long position. The logic is as follows: to buy 2 contracts the system will first need to cover the existing short position. This will involve buying 1 contract. As a result 3 contracts will be bought within the same trade (if they were executed separately commission costs would raise).
If you need further explanations please let me know.