Hello, do professional futures stock traders(swing) hedge with options trading? or they simply do naked futures swing trading? kindly explain with risk management.
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Systematic traders use options to hedge risks; traders who rely on market sense rely more on stop-loss orders.
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but if the morning opening gap down(in case of stocks futures long) is huge like 10% plus, the loss would be huge, right? so, to avoid such cases what an experienced trader would do?
Avoid events. Hedge with options.