Buy/Sell futures

Questions about MultiCharts and user contributed studies.
maxpi
Posts: 58
Joined: 03 Jun 2007

Buy/Sell futures

Postby maxpi » 07 Nov 2007

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??

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Marina Pashkova
Posts: 2758
Joined: 27 Jul 2007

Postby Marina Pashkova » 08 Nov 2007

Hi maxpi,

If you have 1 one contract short position and want to reverse (that is arrive at 1 contract long position), all you need to do is buy 1 contract. The rest will be done automatically.

Regards.

maxpi
Posts: 58
Joined: 03 Jun 2007

Postby maxpi » 08 Nov 2007

I would have thought it would take a "buy 2 contracts" to reverse a short 1 contract position... what words do I use to flatten a position?

2haerim
Posts: 502
Joined: 01 Sep 2006
Been thanked: 2 times

"BuyToCover" will do it.

Postby 2haerim » 08 Nov 2007

BuyToCover is the same as "ExitShort" in TS2ki.

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Marina Pashkova
Posts: 2758
Joined: 27 Jul 2007

Postby Marina Pashkova » 14 Nov 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.


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