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Daytrading SPY and BBH
- Thread starter LelandC
- Start date
The nice thing about these instruments is that you can short on a downtick. Just wondering if anyone out there is daytrading either one of these?Leland
Been trading the SPY for the very same reason. They are tamer than the Q's
You can usually get good fills at either ISLD or REDI
If you get a fill by the AMEX specialist, you will probably lose money
If you get a NX fill by the NYSE especialist, it is usually as good as a ECN fill
I tried the BHH and the SMH, but the spreads are just too huge for me.
RandomWalker
Been trading the SPY for the very same reason. They are tamer than the Q's
You can usually get good fills at either ISLD or REDI
If you get a fill by the AMEX specialist, you will probably lose money
If you get a NX fill by the NYSE especialist, it is usually as good as a ECN fill
I tried the BHH and the SMH, but the spreads are just too huge for me.
RandomWalker
Just a note on ETF's. The liquidity of exchange traded funds may
vary. The most liquid are the QQQ, SPY, DIA. The Biotech Holders
(BBH) , while a volatile ETF , do not have as much interest as SPY or QQQ and can be quite illiquid at times , especially in the pre & after markets. The wide Bid-Ask spread is great for market
makers doing basket arbitrage, not good for pure daytraders trying to liquidate positions. At 8:30 am today, for example , the
pre-market BBH spread was Bid 114.00 Ask 120.55! You could drive a truck through that spread. At the same time the pre-market on QQQ was Bid 33.25 33.28 , 2000 up and SPY was
Bid 110.74 Ask 110.77 , 1500 up. Advice I've learned the hard way, daytrade liquid ETF's. If you daytrade BBH, trade smaller sizes. The liquidity of QQQ and SPY , will be as liquid as the mini's
since the ETF's are arbed against the futures contracts. The "arb"
increases liquidity. There is no Biotech futures contract at this time(BBH).
Gene Weissman
Lieber & Weissman Sec., L.L.C.
gweissman@stocktrade.net
vary. The most liquid are the QQQ, SPY, DIA. The Biotech Holders
(BBH) , while a volatile ETF , do not have as much interest as SPY or QQQ and can be quite illiquid at times , especially in the pre & after markets. The wide Bid-Ask spread is great for market
makers doing basket arbitrage, not good for pure daytraders trying to liquidate positions. At 8:30 am today, for example , the
pre-market BBH spread was Bid 114.00 Ask 120.55! You could drive a truck through that spread. At the same time the pre-market on QQQ was Bid 33.25 33.28 , 2000 up and SPY was
Bid 110.74 Ask 110.77 , 1500 up. Advice I've learned the hard way, daytrade liquid ETF's. If you daytrade BBH, trade smaller sizes. The liquidity of QQQ and SPY , will be as liquid as the mini's
since the ETF's are arbed against the futures contracts. The "arb"
increases liquidity. There is no Biotech futures contract at this time(BBH).
Gene Weissman
Lieber & Weissman Sec., L.L.C.
gweissman@stocktrade.net
Just a note. Trading ETF's on ISLD is fast, however you will give up price improvement-for speed. There is no price improvement on ECN's. Many times you will get price improvement on QQQ,s & SPY's on AMEX & NYSE. I know many do not like the "slower" speed & many think the specialist is "cuffing" orders, but you will get noticeable price improvement many times. I think it's best to
trade all routes on ETF's AMEX,ISLD,NYSE & NYSE NX and use the
route depending on the situation. If the market in SPY is Bid 109.74 Ask109.76 and you want to buy with equal size and it is not a fast market, If you want to Buy at 109.75 and prints
are going off on the AMEX at 109.74, it might make sense to send
your order to the AMEX to Buy 500 SPY@109.75 and get potential
price improvement at 109.74. This would be especially true if
the best offer on ISLD or NYSE is 109.76. Could you miss the stock
at 109.75? The answer is "yes", but for the pontential price
improvement, I would send the order to the AMEX . Most traders
who use direct access software and trade ETF's on ECN's are giving up price improvement mant times to gain speed of execution. I welcome any comments from traders.
Gene Weissman
Lieber & Weissman Sec., L.L.C.
gweissman@stocktrade.net
trade all routes on ETF's AMEX,ISLD,NYSE & NYSE NX and use the
route depending on the situation. If the market in SPY is Bid 109.74 Ask109.76 and you want to buy with equal size and it is not a fast market, If you want to Buy at 109.75 and prints
are going off on the AMEX at 109.74, it might make sense to send
your order to the AMEX to Buy 500 SPY@109.75 and get potential
price improvement at 109.74. This would be especially true if
the best offer on ISLD or NYSE is 109.76. Could you miss the stock
at 109.75? The answer is "yes", but for the pontential price
improvement, I would send the order to the AMEX . Most traders
who use direct access software and trade ETF's on ECN's are giving up price improvement mant times to gain speed of execution. I welcome any comments from traders.
Gene Weissman
Lieber & Weissman Sec., L.L.C.
gweissman@stocktrade.net
Gene, very thoughtful post on SPY execution. My experience is as follows:
1. routing to AMEX never (and I mean never) gives/gave me price improvement. I did a test about a year ago with market orders (both buy, sells and shorts of 100-500 shares): I consistently got filled at the worst possible price over the next one to two minutes. Every time. They held my market orders typically for at least one minute. I consider the AMEX specialists crooks. I never route to them any more.
2. NYSE fills are very good and typically very fast ( < 5 secs) for all types of orders. Randomly get price improvement
3. ISLD is simply fast. You pay the spread every time. But for fast action fills, ISLD is the best. An example would be a trade around todays fed announcement; I'd only consider using ISLD for SPY/QQQ.
I use both NYSE and ISLD for SPY, but prefer ISLD for QQQ.
1. routing to AMEX never (and I mean never) gives/gave me price improvement. I did a test about a year ago with market orders (both buy, sells and shorts of 100-500 shares): I consistently got filled at the worst possible price over the next one to two minutes. Every time. They held my market orders typically for at least one minute. I consider the AMEX specialists crooks. I never route to them any more.
2. NYSE fills are very good and typically very fast ( < 5 secs) for all types of orders. Randomly get price improvement
3. ISLD is simply fast. You pay the spread every time. But for fast action fills, ISLD is the best. An example would be a trade around todays fed announcement; I'd only consider using ISLD for SPY/QQQ.
I use both NYSE and ISLD for SPY, but prefer ISLD for QQQ.