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b.biddles
@thalamu_
Question for high IQ math people: > I go long. > I set TP for 1%, at which point I want to fully hedge the position. Do I set a limit sell order for 201% of the position to achieve this? If not, what's correct?
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b.biddles
@thalamu_
"Do I set a limit sell order for 201% of the position to achieve this? " To be more clear, this should say: "...201% of the position *size* (i.e. if longing 100 contracts, then sell order is for 201 contracts)"
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SBF
@SBF_FTX
Replying to
@thalamu_
Depends on what "size" means. On FTX, "size" means "number of the thing you're trading". On inverted orderbooks, "size" generally means "number of the currency you're using"--often USD. And what do you mean by "fully hedge"? Do you want to end with pure USD or BTC?
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b.biddles
@thalamu_
Replying to
@thalamu_
and
@SBF_Alameda
Sorry I dont think I answered for “size”. So let’s say “size” = 100% of balance @ execution price (with BTC as collateral) Then I successfully complete a long that I close at +1% from avg entry I am looking to close it and be fully hedged accounting for the new profits
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SBF
@SBF_FTX
Replying to
@thalamu_
Got it. And when you say 'long'--since you're saying that 'flat' means 'all synthetic usd', then being flat means depositing BTC to e.g. BitMEX and selling BTCMEX futures to get flat (hedging your BTC collateral). Long would mean just depositing BTC and not trading.
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SBF
@SBF_FTX
Replying to
@SBF_FTX
and
@thalamu_
But I'm guessing that's not what you're saying--if by flat you mean 'flat except for the BTC collateral that you deposit', then: 1) deposit 1 BTC 2) Buy X contracts 3) 1% higher, sell X*1.01 contracts Then you bought X/P BTC and sold X/(P*1.01)*1.01 = X/P BTC
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b.biddles
@thalamu_
Replying to
@SBF_FTX
and
@SBF_Alameda
Thank you, Sam! I am saying the former! By ‘flat’ I mean short the amount I deposited plus any gains. I am looking to be fully synthetic USD the entire account balance after each trade. What is P in your equation? 🙏🙏✊
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