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Hedge MGC micro gold futures


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xoxman19
Thailand
 
Posts: 3 since Aug 2019
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Hi guys,

I'd like to hedge a MGC position with a GC Put options. Since the relation between the GC and MGC is 1:10 I'd like to know how far I can go down with the put strike to hedge ATM ?

Thanks
Peter


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 SMCJB 
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Well theoretically you'd want to buy a put with a 10% delta. Problem with that will be that it will be quite a long way out of the money, so the market could drop quiet a lot and you could make nothing on your put. A slow gradual down move to just above your put strike would be your worst case scenario.


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xoxman19
Thailand
 
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SMCJB View Post
Well theoretically you'd want to buy a put with a 10% delta. Problem with that will be that it will be quite a long way out of the money, so the market could drop quiet a lot and you could make nothing on your put. A slow gradual down move to just above your put strike would be your worst case scenario.

Thanks ! I found that the GLD options are a much better fit and the premium is much lower.


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Last Updated on September 2, 2019


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