How do the BIG BOYS trade?
- Thread starter saxon22
- Start date
Hear,Hear!!!
Thats the best post on this topic I have seen here, and this topic gets beaten to death.
The people here who think you just plunk money down and play in a big arena or trade as a pro and its the same as trading a retail account are sadly mistaken. Go ahead and see whats involved with buying or leasing a seat on the CME. You dont just show up with cash, the function of a market maker on an exchange is not to stand there and take shots on direction while he runs around from pit to pit.
In the equity options area these days most the the local market makers are gone. What you have left is a bunch of young guys who stand in the pits ( where there are pits left) and hold a small lap top where their firm feeds them prices for the options they make markets in only in the pit they are assigned to. They simply raise their hands and card up trades as they come into the pit. All the real risk management is done from the home office and mostly its one big dispersion trade, not directional speculation.
Why do people get so bitter here about the big firms and professional traders? If you have proof they're shorting into upgrades then show up and the DOJ and the SEC. Does that shit go on? Sure at times it does and it did a lot more 10 years ago and further but its not all that easy to do. If you're a big firm and you're doing it in HUGE size to make the risk worth while it gets pretty obvious.
Jim Crammer sells ad time on a TV show, thats his job. His job is not to make you money. Despite all the hate for him on boards all over the internet the guys made a heck of a lot of money and he's been in the business a long time with a good education too. His job is to keep the public interested in what he's talking about and tuning into his show. It just happens to be about the markets so people interested in the markets tune in. He's not trying to screw anyone, what would be the point? He'd lose viewers and market share in TV is the name of the game.
Here is a perfect example of what not to do. You read this and say, see, these guys are doing it, it must be true.
When you see one or two or a handful of people being successful at something, be very wary that it is simply that no matter what pattern you seek, you will find it eventually. It is no indication of a real edge. If you don't understand even simple statistical analysis like this, stay away from trading.
What you want to see is a bunch of people making money trading some particular way, but not so many so that you are fighting for pennies. The Bright Opening thread is the only thread on ET where tens if not hundreds of traders make money trading this way it. Something like this is what you want to see.
Once again, go and see for yourself. All this place is going to do is confuse you further.
nitro
Most fund managers either underperform the market (Especially mutual fund managers who arerisk adverse, but of little value).
The giant hedge funds are just plain "iffy" IMO for the most part.
The small (under $30Million) are simply starting to go away, not enough "easy money" out there it seems these days.
And, yes, I agree, the few good ones understand risk/reward very well.
Don
Big boys usually like food with a lot of fat and cholesterol so they tend to stick with stocks like Mcdonalds and Kraft...