Late Night Trading?

  • Thread starter Thread starter dkamp
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dkamp

Having explored stock and (US) futures trading, and being a night owl, I was curious now as to what the best vehicles are for trading late at night (i.e., with reasonable liquidity, volatility, access, fees, etc.).

Is IB able to do this via their "retail" accounts? Are overseas markets accessible? Are there special account and tax issues? Etc.

Perhaps def knows something about this...
 
I'd vote for Hong Kong Futures as that's what I've been doing the past 6+ years. They are volatile though. IB offers them and the speed and commissions are very good. IB doesn't offer Hong Kong stocks due to throughput issues. Believe it or not, the stock exchange only allows 1 transaction per second per Exchange right. IB's affiliate, Timber Hill is the leading market maker in Hong Kong, as is unwilling to compromise its stock transaction speed and thus doesn't offer them. We've flirted with buying another exchange right but for only 1 additional transaction per second it is not worth it. If you want to trade HK stocks, I could point you to a few online brokers who have a number of exchange rights and thus speed should be ok. Next week (27th) the futures exchange will be cutting the contract size on stock futures which may reviatilize them. There is always a market in the near month but they hardly trade. IB could offer them within a day or so if there was any demand.

You may want to look at Sydney Futures (IB offers them for non-clearing clients and will be offering them for clearing clients within the next couple of months). They don't have the volatility of Hong Kong but they are very liquid. I couldn't recommend trading Australian stocks unless you stuck to a few of the very big names.

Japan/Korea: I don't have much knowledge on those markets on the retail level and thus can't offer any decent advice.

Europe: IB offers futures and if not already launched, London/Eurex stocks. Naturally this is where you'll find the most liquidity but by the time these start you may be asleep.

Tax issues: HK no. Australia not that I am aware of. For europe I don't think so either but am not 100% certain. IB does offer a multicurrency account where you could fund in one currency and take care of your Fx Hedging.

If you want more info on one of the markets, let me know.
 
Thanks def! For everyone's benefit, will post my followup questions here:

- With respect to Hong Kong stocks, "1 transaction per second per exchange right" is referring to Timber Hill's total transactions, right? Or did you mean 1 transaction per customer account per second? And does that apply to everyone, even citizens of Hong Kong? Is this an attempt by Hong Kong to reduce volatility, to keep little guys out, to reduce foreign influence, or what?

- Setting aside HK stocks for moment...How do HK futures compare to vehicles such as E-Mini Nasdaq and S&P? Is there a corresponding index-based futures contract? Or major stock or non-stock futures that serve same purpose? What will be the minimum contract size starting next week (some dollar-based comparisons would be helpful)?

- Similar questions about Sydney Futures. Also, as a "retail" customer of IB, do I have to wait the few months before being able to trade these? Australia is obviously appealing because of timing and language.

- Okay, so assuming we can come up with some appropriate vehicle, how does one go about getting overseas price, volume, etc., info into a good quote/charting program? I assume the TWS will show up-to-date quotes for the Australian futures, but I'll probably need to plot this stuff using another program to trade it intraday. And with the TWS itself, will I encounter significantly more problems with the reliability of overseas quotes and executions? Or is that one of the things that IB has gone a long way towards ironing out?

Thanks!

 
Hi dkamp,
I am pretty active on the Sydney Futures Exchange. To answer some of your questions, the stock index contract is called the SPI 200, it has a point value of $A25, contract size of approx $80k and margin of $2200.

Regarding reliability of quotes executions, I live in Australia and use IB to trade globex and a/c/e. It takes about 2 seconds to get my orders confirmed in the market. For SFE, it takes about 1/2 second (I use a local electronic broker here). So to get orders from the US to Aus would probably take no more than 1-2 seconds.

Just a word of warning about the SPI, it is regarded as one of the most difficult markets in the world to trade. A broker with 20 years in the business once told me he has never had a retail client make any money daytrading this market. I think you need to have a lot of local knowledge to be successful in the SPI.

Good luck!
 
Originally posted by dkamp
Thanks def! For everyone's benefit, will post my followup questions here:

- With respect to Hong Kong stocks, "1 transaction per second per exchange right" is referring to Timber Hill's total transactions, right? Or did you mean 1 transaction per customer account per second? And does that apply to everyone, even citizens of Hong Kong? Is this an attempt by Hong Kong to reduce volatility, to keep little guys out, to reduce foreign influence, or what?

1 transaction per second is a restriction set by the exchange for each trading right. (so a basket of 30 stocks will take 30 seconds to execute per broker trading right). It has nothing to do with keeping the foreigners out. In HK there are over 500 brokers and when they went from manual order entry to electronic entry this concession was made given the power of the small broker. For some crazy rason they fear brokers like IB :). The rule has the effect of lowering overall volumes but not volatility.

- Setting aside HK stocks for moment...How do HK futures compare to vehicles such as E-Mini Nasdaq and S&P? Is there a corresponding index-based futures contract? Or major stock or non-stock futures that serve same purpose? What will be the minimum contract size starting next week (some dollar-based comparisons would be helpful)?
HK futures:
HSI - 50 HKD per tick - future of Hang Seng Index - liquid
MHI - Mini HSI 1- HKD per tick - less liquid but arbed into line if not within HSI bid/ask spread.

Stock Futures:
listed on most stocks in the Hang Seng Index. Always a two sided market but little volume. Problem is that the brokers do not market them because commissions are a fraction of warrants and stocks. The minimum contract size is changing to equal a board lot of the underlying stock. i.e. stock futures had multipliers of 2-5000 shares per future. Now they will equal the minimum size of the underlying (100-2000 shares). - Just realized, if you are US citizen - forget about overseas stock futures until December. You are prohibited from trading them.

- Similar questions about Sydney Futures. Also, as a "retail" customer of IB, do I have to wait the few months before being able to trade these? Australia is obviously appealing because of timing and language.

we've had a lot of interest in Sydney futures (mostly because we will come in with a great commission). I trade those markets as well and while do not totally agree with zentrader on the ability to make a profit I wouldn't argue with him either. The market is often range bound, can trade at a premium or discount for months at a time and there has been great manipulation around expirations.

- Okay, so assuming we can come up with some appropriate vehicle, how does one go about getting overseas price, volume, etc., info into a good quote/charting program? I assume the TWS will show up-to-date quotes for the Australian futures, but I'll probably need to plot this stuff using another program to trade it intraday. And with the TWS itself, will I encounter significantly more problems with the reliability of overseas quotes and executions? Or is that one of the things that IB has gone a long way towards ironing out?
More...

For Sydney we are in the process of going over some agreements which will probably be done by end of September.

For HK, we are up and running. Accounts should be approved within 1-2 days. Wires into Citibank would be available for trading the next day. The quotes are fast and accurate. (we have a number of institutions trading the HSI future from the states. They have related to me that they are quite happy with the service). The system has been very reliable with downtime limited to maybe 1/2 hour over the past year.

For graphs on Australian futures I'd have to do some research (perhaps zentrader can point you in the direction). For HK, there are a number of services that would cost about 25-50 US per month.

If I missed anything, let me know.
 
Wow! This is much further along than I would have guessed. (Looked into forex trading but was scared off by funky state of things with respect to forex brokers and retail traders.) Will do some further research into above responses tonight and post any further questions or findings...

I guess an immediate question would be that of a typical setup for overseas trading: IB + ? + ? Sort of tied to other current thread about what charting and quote packages to use with IB.

Thanks again for all the info.
 
thanks guys...lot's of stuff to explore...

With respect to zentrader's comment, my trading style requires reliable data feed, live charts, and fast executions during most active part of trading sessions. Just hoping to eventually extend trading day beyond few good hours in US.
 
From ProSticks:

"If you would like to view the Real Time HSI Furture, I guess our realtime service which includes Real Time Currencies, HSI Index and HSI Future Charts and Quotes will suit you better and the monthly fee is only HK$188 [about $25/month]. Our Real Time Service does include a 5 mins, a 15 mins and an hourly Bar and Candlestick Chart but not including 1 minute chart. For you reference, the exchange rate for US$1.00 is HK$7.80. Hope this can help."

Will have to find out whether their "candlestick" charts are actually "prostick" charts (i.e., with the additional info that a prostick includes with each bar), and whether the most recently plotted prostick is continually updated in real time. (def, do you actually use ProSticks? What such tools are you using to trade the HSI futures? Or does your trading style not require such support?)
 
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