This is my opinion also...but I guess that we'll just have to wait and see. I personally think that the largest problem will arise in the ability for a common invester/daytrader to trade them...since I haven't seen many brokerages offering them... :eek:
a shout out to the seasoned veterans
- Thread starter darkhorse
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This is my opinion also...but I guess that we'll just have to wait and see. I personally think that the largest problem will arise in the ability for a common invester/daytrader to trade them...since I haven't seen many brokerages offering them... :eek:
They haven't been launched yet, they are still ironing out the technology issues. Time frame is 3-6 months away yet.
Don't worry though, everybody will offer them, it will be a competition thing, because any brokerage that doesn't will see their active brokerage clients stampede out the door. They are gonna be real popular, real fast.
I have my doubts that SSf's will be that popular. The problem is that there will be four or five different exchanges or platforms and none will offset each other. In other words, you buy a MSFT future on OneChicago you can only sell it there. Not like options where there is one clearing house. Without adequate liquidity, the spreads will be wide and bids/asks thin, kind of like options today. Of course that will open up opportunities to play MM, since I seriously doubt they will be dumb enough to impose anti-competitive rules like the options exchanges do on making a market.
The other problem is there are a limitd number of traders to trade all this stuff that is becoming available, eg Lev II, NYSE, globex, bonds, notes and eorudollar futures, currency futures, cash fx, stock options and now stock futures. The average investor or online trader will never go near these things, they have no idea how to trade the e-mini's.
The other problem is there are a limitd number of traders to trade all this stuff that is becoming available, eg Lev II, NYSE, globex, bonds, notes and eorudollar futures, currency futures, cash fx, stock options and now stock futures. The average investor or online trader will never go near these things, they have no idea how to trade the e-mini's.
None of that matters, because the incentives for trading futures over straight stocks is going to be so huge that the hedgies and big players will not be able to resist them. Look at it this way: if you trade stocks on margin, you have to pay something like five percent in interest right? With single stock futures, not only is there higher leverage, you can EARN interest on your capital by parking it in t-bills. So you go from -5% to plus 2% and get more leverage to boot. That's a 7% profit swing right there, all by itself. Add in the no uptick rule and the fact that you can always get your short on in futures and never be called away, and you have a far superior hedging vehicle. SSF's will also draw hedging capital away from options because straight futures are less complex, no time value element to factor in, and hedging a stock with the underlying futures for that stock is just about the cleanest and most efficient way you can do it. The structure of the futures contract is superior for trading in just about every way.
Small players may be last to the party but it won't matter- the big boys rule the sandbox anyway, and they will be all over SSF's in a heartbeat. One of the 4 competitors will catch on, volume will snowball and attract more volume, and then we will have a ballgame.
You hit it right on the head.I can't wait for SSF's. I think SSF's could have the same impact as on-line trading did on the stock market.Once the internet became a way for people to trade,it increase volume and volatility in stocks. I expect the same to occur.Maybe not to the same degree but it should lead to some interesting fireworks.I believe you are going to see more multi point moves in those stocks that trade as futures. So an AOL might again become a several point mover in a trading day.
We have SSF's in the UK, traded on LIFFE; albeit volume is increasing, comment has been made on the wide spreads (rather like UK spread betting firms) and the opinion that straight FTSE, SP500 etc Futures and emini's are better trading vehicles because of lower spreads and broker commissions (IB et al).
US SSF's are available on LIFFE and now Chicargo (soon). Will this lead to competition resulting in lower spreads (If volume picks up) ?
Toby
UK
US SSF's are available on LIFFE and now Chicargo (soon). Will this lead to competition resulting in lower spreads (If volume picks up) ?
Toby
UK
I guess "seasoned" applies to me, as well as "old"...anyway..I have a couple of questions. Were you doing well as a Futures trader? If so, you might consider not starting a "hedge fund" (borrowing money from others ...and having to split your profits with investors), and putting up a small amount of capital yourself, and keep all your profits.
I won't belabor the issue here (for fear of "advertising"), but will make an offer to discuss with you the options available to you when you switch to equities.
I won't belabor the issue here (for fear of "advertising"), but will make an offer to discuss with you the options available to you when you switch to equities.
I think this site has the info on US Single stock Futures and an email address for questions etc, concerning them:
http://www.onechicago.com/
http://www.onechicago.com/