Enveloping orders

Nordic · Sep 5, 2003

Quote from Don Bright:

Come by my office and I'll be happy to show you the 'instant out" feature.

Don

Thanks Don, but I'll pass, I already have a "cancel all " button. I even have it hot keyed

But it don't mean sqwat if the specialist chooses to hold it. And that's exactly what he will do if a serious event occurs and you are on the wrong side.

Dustin · Sep 5, 2003

Don is this new cancel thing anything more than a "cancel all" button? I know Redi used to have delay problems with that function, so now it is just fixed....or something better?

riskreward · Sep 5, 2003

Redi cancels seem to take forever on NYSE for me. Is that a problem with NYSE, redi or both?

Nordic · Sep 5, 2003

Quote from riskreward:

Redi cancels seem to take forever on NYSE for me. Is that a problem with NYSE, redi or both?

If you see cancel pending immediately, then it's generally not your provider. On the NYSE your waiting for the specialists to cancel your order

nitro · Sep 5, 2003

I talked about this on Don's thread a while back:

http://www.elitetrader.com/vb/showt...4363&highlight=puts+tax+deductible#post294363

I have less of a problem from the individual's point of view than I do for the firm's point of view (there are always people in a firm that put the metal to the pedal in any strategy, and one REALLY BAD event and we all go down with them) and my problems are the envelopes to buy more than envelopes to sell.

nitro

Quote from Dustin:

I agree that prop traders with limited capital at risk can have a good risk/reward ratio with envelopes. I did them and made good money. BUT I do not feel the risk/reward is worth it for a firm promoting it to all of their traders. The firm is more at risk with this strategy than any other that I can think of. That was my point and I would enjoy hearing arguments against that.

Don Bright · Sep 5, 2003

Quote from Dustin:

Don is this new cancel thing anything more than a "cancel all" button? I know Redi used to have delay problems with that function, so now it is just fixed....or something better?

This works a lot quicker, only from the redi basket manager......pretty cool.

Don

Don Bright · Sep 5, 2003

Quote from Dustin:

Don is this new cancel thing anything more than a "cancel all" button? I know Redi used to have delay problems with that function, so now it is just fixed....or something better?

See above about the function, which is only on the basket manager. I just tested it with 15 stocks, total time from "cancel pending" to "UR out" for all of them was 2 seconds. We've been pretty happy with Redi since about January (when we were having some concerns)....they added some servers, and a few more "bells and whistles" for us.

Don

riskreward · Sep 5, 2003

would a new trader be better off trading 3 or 4 large caps at midday? My thinking is that most of the big orders come through in the morning so you don't get filled as much mid afternoon but you take on less risk of getting filled on a trending stock. Am I right?

And Don, how many stocks are your traders enveloping thse days to make a worthwhile profit?

Don Bright · Sep 5, 2003

Quote from riskreward:

would a new trader be better off trading 3 or 4 large caps at midday? My thinking is that most of the big orders come through in the morning so you don't get filled as much mid afternoon but you take on less risk of getting filled on a trending stock. Am I right?

And Don, how many stocks are your traders enveloping thse days to make a worthwhile profit?

This really has a wide range, from 1 stock to a couple of hundred. Remember, we like our traders to be "surrogate specialists" and they essentially keep bid and offers in "their" stocks all day long. Moving the prices around as need be. As they progress, their share size increases, and 25 cents / day x 2000 shares equals $100K per year.

It really depends on the trader's confidence and experience.

Don

riskreward · Sep 6, 2003

I've never done this before and nobody does it in my office so it'll seem like an odd question. How many fills do you get on average? I'm sure it depends on volatility and volume (if the specialist doesn't have large size than he doesn't gap the price right?). And what is the size of the print you guys catch?