How to Defend a Losing Futures Trade

Jun 14, 2022

By The Small Exchange

Overview

Jermal and Frank dive into a losing futures trade to show you what it looks like while presenting three methods for defending a losing trade. Their methods range in aggressiveness from the short-term bandaid of selling a put to the long-term conclusion of taking a loss. The futures dudes use a short Small 10YR Yield (S10Y) futures trade as an example to show you how to sell options against the position, spread off the risk with another market, or simply take the loss and move on.

Losing trades should not simply be blocked out of your mind, being proactive in defending a losing trade can help reduce losses in the short term and create profits in the long term.

Contents

0:05 How to Defend a Losing Futures Trade

1:52 US Interest Rates are at Highs Since 2008

2:30 How can you Defend a Bad Short Position?

4:40 Selling a Put

5:15 Spreading Off

6:30 How to Manage Losses

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