I would love some feedback on the following idea:
I have an account with a trading platform that provides a guaranteed stop loss on the SPI Index.
So would the following work?
Just prior to the Index closing 8.00am Saturday morning open two positions one long & one short. Set a low guaranteed stop loss (say 15 points) on both positions.
The index then opens at 9.50 Monday morning.
In theory the market will move greater than 15 points?
For example the market opens 40 points higher.
Your short position closes at a loss of 15 points
Your long position is ahead say 35 points (less 5 points for the spread & the guaranteed stop loss)
Less the loss of the short position 15 points.
In theory you are ahead 20 points.
With the long Labour day w-end approaching this could increase the potential for a greater move in the market on open.
What do you guys think?
Following the suggestions of keeping losses low (caped) and not limiting your gains.