for daytrading...which is most important to monitor for market movement?

Quote from lindq:

Just keep things simple and monitor the S&P. By keeping a one-minute chart of the S&P open on your desktop you'll see all you need to know when considering a trade, which is overall market direction.

IMHO, anything else is overly complex.

There is a tendancy in this business to make things a lot more complicated than they need to be in order to be a successful trader.

By and large, most experienced traders will tell you that as their career progressed, their indicators and setups got less complicated, not more.
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I agree with this method, but I use the DOW 30, especially once I'm in a trade. As long as DOW confrims the move I try to stay with it.

PS. I'd really like someone to show me how you trade PREM.
 
Quote from dsq:

Thanks Don...i meant calculate the sp500 premium or discount by seeing where certain in the money sp500 index options were trading at vs the sp500 index....
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If you check the conversion pricing they will all be within a tick or two (max) of current Fair Value.

And, the Reverse Conversion where traders collect interest on the short underlying sales.


Reverse Conversion

A finance and risk management technique based on a put-call parity strategy that consists of selling a put and buying call (a synthetic long position), while shorting the underlying stock. As long as the put and call have the same underlying, strike price and expiration date, a synthetic long position will have the same risk/return profile as ownership of an equivalent amount of the underlying stock.

In a typical reverse-conversion transaction, a brokerage firm short sells stock and hedges this position by buying its call and selling its put. Whether the brokerage firm makes money depends on the borrowing cost of the shorted stock and the put and call premiums, all of which may render a return better than the money market with very low risk. In the context of futures markets, a trader would be synthetically long and short the underlying futures while looking for arbitrage opportunities.



Long Underlying, short call, long put....that's why there is little edge, if any, with most of the options strategies.

Don
 
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