"program trading" at home

[rs7]

Has anyone here attempted to trade derivatives against a basket of stocks (any strategy) on the kind of scale that can be done as a prop trader or customer (ie: small scale)?

I have never traded the e-minis, but they seem to get talked up quite a bit on ET. I was wondering if anyone has tried to link these contracts to a basket, or to options, or anything else that may present opportunities to arb an aberration of prices.

I have traded the big S&P's against the OEX and baskets, but that was on the floor and with member haircut rules. It was also a long time ago. It was also just a job with a salary (and relatively small bonuses).

I have been giving a lot of thought recently to trying to get away from trading as a firm trader, yet I am quite uninformed about what is available to the individual trader. I obviously wouldn't have the kind of BP I have had as a firm trader, yet I have found that trading equities exclusively as I have been for the past several years is only getting more and more difficult.

I am unfamiliar with how "customer margin" would work in most derivative positions. Or if firms like Echo or Bright, (or whoever) let traders hold positions based on firm haircut.

Any input appreciated.

Thanks,
RS7

 

[larrybf]

R7: i am not sure this will help but just a simple trading approach with the emini transformed me from a MARGINAL stock trader into a futures trader who could support family from trading. two big reasons. technical analysys works much better on the index and just looking at the smae chart each day gets you to know the road bumps very well. hope that helps

 

[rs7]

Originally posted by larrybf
the emini transformed me from a MARGINAL stock trader into a futures trader who could support family from trading.

Thanks for your response. Do you scalp the minis? Do you only trade them, or are you trading other instruments as well?

 

[LelandC]

rs7,

It's interesting that an equities veteran like yourself is talking about how difficult trading equities has become. I think that speaks volumes....

Leland

 

[dotslashfuture]

judging from your first post you have already thought about the scale problem. I would think that the percentage gains after commissions and bid/ask spreads would be very very small.

 

[larrybf]

YES R7. I SCALP THE EMINI WITH A 3 MIN TIME FRAME. LOOK FOR 2-4 TRADES. 3 POINT STOP LOSS. 2-5 PROFIT TARGET DEPENDING UPON PRICE ACTION. I TRADE ABSOLUTELY NOTHING ELSE NO MATTER WHAT.

 

[rs7]

Originally posted by dotslashfuture
judging from your first post you have already thought about the scale problem. I would think that the percentage gains after commissions and bid/ask spreads would be very very small.

I guess I should re-state my question...

Let's say for example I put on a trade that in a customer account would require 30K buying power. If this trade will yield net just $100, but it is a riskless, or close to a riskless trade, is there a way to get "haircut" the risk a rather than be required to tie up the buying power? Can this be done off the floor?

Maybe this is a question for Don?

Thanks anyone,
RS7

 

[rs7]

Originally posted by LelandC
rs7,

It's interesting that an equities veteran like yourself is talking about how difficult trading equities has become. I think that speaks volumes....

Leland

I have found it difficult to trade stocks for a while. If I did not have a lot of buying power as a firm trader, I would not have made enough money for the past year to live on. I don't know how you guys do it.

RS

 

[marcD]

Originally posted by rs7

I have found it difficult to trade stocks for a while. If I did not have a lot of buying power as a firm trader, I would not have made enough money for the past year to live on. I don't know how you guys do it.

RS

That doesn't sound real encouraging. Can I ask what you consider "a lot of buying power"?
thnx, Marc

 

[rs7]

Originally posted by marcD

That doesn't sound real encouraging. Can I ask what you consider "a lot of buying power"?
thnx, Marc

I meant more buying power than one would fund a personal account with (at least the people I know....pikers like myself )