challenging trading environment
- Thread starter captainkirk
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Dustin, from what I gathered from WorldCo risk mgmt in NYC is that it costs $5000 a month just for the feed itself and then an extra $50 a month for every person that is subscribed. WLDC let us try it out if we wanted it if the trader trades at least 20,000 shares a day, which is a fairly reasonable amount. Some of the traders that have been around awhile cannot adapt to it and find that using their old ways of trading work best, but the newer traders seem to be doing really well with it. From what I gather, the new traders feel more comforable about getting involved in a trade if they can see the depth rather than judging the depth from the T&S. This all makes perfect sense to meand I stressed that in my lecture series this past Thursday when I spoke about my use of the Open Book. All in all, I like the book and have greatly noticed that my trading size has increased. I might buy or sell a few thousand shares at a time knowing that there is someone a cents behind me rather than a thousand or two as I would have before. Also, since I used to trade Nasdaq while I was in school, it brings back a "home" feel to the L2 screen.
NYSEat21
NYSEat21
Shorteee, that post has some info on the fees if you are interested. I forgot to post that to you
Anyway, Dustin, you wanted to know what the pre market looks like on the book. Basicly, it will depend on the stock. On Friday, CC got smoked, so on the book before the open I saw large blocks on the offer about every .10-.25. Some were placed below the opening print and some were above. The specialist will come in and print stock where he feels the price is fair for both sides, but from what you can see in the morning, you knew CC was gonna get smoked. Now, there is one thing about the open book that I don't like. In the morning idiots will display crazy orders sometimes 1-2 points below the bid and this crosses the market for the stock obviously. What will happen is there will be a checkmark by the bid that crossed the offer and a checkmark by the offer that got crossed or vice versa. These orders will usually be for 1-300 shares and will crowd up the book for 3-6 levels depending on the volume of the stock. The greater the volume, the greater the crosses in the morning. From what I gather, the specialist is to busy filling orders in the morning to take those smaller orders off the book, so they stay on for about 15-30 minutes. After that, usually the first level is hte bid and offer. Our IE Blotter software uses the checkmark, but I'm not sure what others have. I like this feature because I can instantly see if someone is trying to get a large block filled. What you will see on the book is someone bidding 15,000 ,maybe, .50 above the offer all of a sudden. The stock will freeze for a few seconds and the offer will zoom up maybe .25-.30 and that 15,000 may print out there. But, since it takes a few seconds to fill that order, what I will do is try and get 500-1000sh at a good price and get involved in the gap-up then sell it to the shorts that get squeezed out. I may not make a full point, but I might get an easy $100-200 out of it just by being alert to what is going on. Like I said before, some like and some don't. It is totally up to the trader. If the old school systle of watching the tape works for you, then why change. But, if you are newer and/or areused to L2, then give it a shot. Every advantage I can get I'll at least take a look a
NYSEat21
Anyway, Dustin, you wanted to know what the pre market looks like on the book. Basicly, it will depend on the stock. On Friday, CC got smoked, so on the book before the open I saw large blocks on the offer about every .10-.25. Some were placed below the opening print and some were above. The specialist will come in and print stock where he feels the price is fair for both sides, but from what you can see in the morning, you knew CC was gonna get smoked. Now, there is one thing about the open book that I don't like. In the morning idiots will display crazy orders sometimes 1-2 points below the bid and this crosses the market for the stock obviously. What will happen is there will be a checkmark by the bid that crossed the offer and a checkmark by the offer that got crossed or vice versa. These orders will usually be for 1-300 shares and will crowd up the book for 3-6 levels depending on the volume of the stock. The greater the volume, the greater the crosses in the morning. From what I gather, the specialist is to busy filling orders in the morning to take those smaller orders off the book, so they stay on for about 15-30 minutes. After that, usually the first level is hte bid and offer. Our IE Blotter software uses the checkmark, but I'm not sure what others have. I like this feature because I can instantly see if someone is trying to get a large block filled. What you will see on the book is someone bidding 15,000 ,maybe, .50 above the offer all of a sudden. The stock will freeze for a few seconds and the offer will zoom up maybe .25-.30 and that 15,000 may print out there. But, since it takes a few seconds to fill that order, what I will do is try and get 500-1000sh at a good price and get involved in the gap-up then sell it to the shorts that get squeezed out. I may not make a full point, but I might get an easy $100-200 out of it just by being alert to what is going on. Like I said before, some like and some don't. It is totally up to the trader. If the old school systle of watching the tape works for you, then why change. But, if you are newer and/or areused to L2, then give it a shot. Every advantage I can get I'll at least take a look a NYSEat21
***WLDC let us try it out if we wanted it if the trader trades at least 20,000 shares a day, which is a fairly reasonable amount.***
Not sure about your branch policy, but everyone on my team has it, and with the exception of myself, no one come close to average that, as I said, one of my guys probably trades 2000 shares roundtrip on a good day yet he still has it.
Not sure about your branch policy, but everyone on my team has it, and with the exception of myself, no one come close to average that, as I said, one of my guys probably trades 2000 shares roundtrip on a good day yet he still has it.
Hitman, how many shares do you trade? I have only been there 4 months and I'll pump out 65-75k a day easy by flipping 2-5 thousand share lots on CPN, MIR and TGT all day long. We have guys pushing 250k shares a day, not including MOC's, at the end of the day. I might have misled you with the 20,000 shares. Our newer traders will do about 10,000 buy side and 10,000 sell side on average, which will equal 20,000 a day. All our traders have access to it, but the ones that do not trade the bigger size tend to pay higher per share fees anyway, so I guess that is how they make up for it. AS your size increases, your fees go down obviously. I find it difficult to not push the buttons on the NYSE and AMEX markets and still be able to make mid 4 figures a day. You would have to catch some size moves in insurance and buy CB, HIG, ACE, RE, PRE, XL, RNR, and RNR or APC, CVX, P, RD, APA, BJS, DO, NE, WFT, DVN, and RIG in oils to make mid 4 figs trading small size.
Bryan Roberts
Guest
Geezzzzzzz, here i am agreeing with Don again!!!! It is threads like this one that keep me checking elite trader daily. I agree with Don that all new traders that trade NYSE should really pay attention to these post. I had heard that the open book was useless but now i will pursue it to find out for myself. Just like direct+, whether you like it or not, one needs to know the rules and how they effect the specialist to understand the new dynamics that are in play.
Aw, geeezzz back to you, Bryan. We're going ahead with the test program, but since we are mostly "tape readers" --and I confirmed that there is in fact a "hard wired" delay in the system, my first guess is that we will not bother with it. I anticipate similar "games" as with L2 (which is pretty much a joke at this level of trading anymore)...but we will have more scoop soon....
Hitman: 2,000 shares a day?? We encourage our brand new people to keep each trade small (100-300), but to at least get involved from the opening bell. Do the "team leaders" set the number of trades?? I'm just curious if you guys tend to follow a "Schoenfeld" type of regimen, or if the traders can trade at their own pace. Please don't get me wrong, I have always maintained that Schonfeld has a great training program for their employees.
Glad to see actual "trading" posts...from everyone!
My traders work at their own pace. I mean I don't want to yell at the guy and force him to trade if he doesn't see the set-ups. I always encourage new guys to take as many shots as possible to speed up the learning curve.
This is where we differ from the management perspective. When a trader loses money at Bright, it is his money. When a trader loses money at Worldco, it is our money. That is a very important difference. At Bright you can only benefit when the trader takes 100 shots a day, at Worldco there is something called swallow his loss.
Not to mention I don't see why everyone on my team should become scalpers. Granted for my own financial interest, it is the lowest risk highest reward route. For the goal of eventually turn a rookie team with a rookie coach into a serious contender, I need variety. So if someone takes it slow and prefers to hold on, while I encourage him to take more shots, I don't need him to trade when he doesn't want to.
The training program mean nothing. You show the guy the basic mechanic knowledge. He goes out there, and fail over and over and over and over and over gain, only then he has a chance to make it.
NYS:
I was just pointing out the fact that our firm does not require volume to get the open book. Nor it increases your commission rate because you were averaing 50K shares a day before and 25K shares a day now. You get flexibility at least that's how the NY branch is ran.
To answer your question I currently average 40-50K a day roundtrip. I can never see myself going 10K in one or two positions as I have modeled my game after the number 3 trader in our firm (size wise) who is a basket trader and starts everything with just 1000 shares or so but takes like 40-60 positions at a time.
I probably won't get that extreme but currently I am a lot more comfortable taking 8 positions 500 shares each diversified and pyramid as neccessary than 2000 shares 2 positions.
That said, taking bigger size has always been one of my problems. It will take some time because my natural character is to play it safe. Hence versus most traders my learning curve was relatively short and painless, and I was able to achieve a high level of consistency early, but in late game I am not sure if I can unlock myself to be as aggressive as my individual position size is among the smallest of traders of my experience.
This is where we differ from the management perspective. When a trader loses money at Bright, it is his money. When a trader loses money at Worldco, it is our money. That is a very important difference. At Bright you can only benefit when the trader takes 100 shots a day, at Worldco there is something called swallow his loss.
Not to mention I don't see why everyone on my team should become scalpers. Granted for my own financial interest, it is the lowest risk highest reward route. For the goal of eventually turn a rookie team with a rookie coach into a serious contender, I need variety. So if someone takes it slow and prefers to hold on, while I encourage him to take more shots, I don't need him to trade when he doesn't want to.
The training program mean nothing. You show the guy the basic mechanic knowledge. He goes out there, and fail over and over and over and over and over gain, only then he has a chance to make it.
NYS:
I was just pointing out the fact that our firm does not require volume to get the open book. Nor it increases your commission rate because you were averaing 50K shares a day before and 25K shares a day now. You get flexibility at least that's how the NY branch is ran.
To answer your question I currently average 40-50K a day roundtrip. I can never see myself going 10K in one or two positions as I have modeled my game after the number 3 trader in our firm (size wise) who is a basket trader and starts everything with just 1000 shares or so but takes like 40-60 positions at a time.
I probably won't get that extreme but currently I am a lot more comfortable taking 8 positions 500 shares each diversified and pyramid as neccessary than 2000 shares 2 positions.
That said, taking bigger size has always been one of my problems. It will take some time because my natural character is to play it safe. Hence versus most traders my learning curve was relatively short and painless, and I was able to achieve a high level of consistency early, but in late game I am not sure if I can unlock myself to be as aggressive as my individual position size is among the smallest of traders of my experience.
Thanks for the response, and just for the sake of clarification...we only encourage trading often as a way of "on the job training" - starting with opening plays, just to be "in the game'. Our continuing education and weekly motivations are geared toward developing traders who are very indepenent in their thought process (as I think you guys do as well), and as we all know....the only thing that matters in the long run (trader or firm)...
is that the traders be profitable.
I have a question for you that I will send privately ( I was going to post it, but thought it might better said "off the record"...no big deal, just about fees etc. that were told to me by one of your traders.)...thanks!!
Sorry that I didn't get a chance to see you at the expo...I stopped by Echo (next to your booth) a few times, but was told that you weren't there.
is that the traders be profitable.
I have a question for you that I will send privately ( I was going to post it, but thought it might better said "off the record"...no big deal, just about fees etc. that were told to me by one of your traders.)...thanks!!
Sorry that I didn't get a chance to see you at the expo...I stopped by Echo (next to your booth) a few times, but was told that you weren't there.