Questions for Don Bright

M

Maverick74

Hey Don, I started a general thread for you. Just like your monthly column in TASC that you do. Now no need to worry, I didn't start this thread to "sandbag" you.

However.......I do have a question for you. I see you are going to be doing one of your marketing events with the "Denver Trading Group" next week. In your advertising piece you mention this "Leveraged ETF's - better than Futures for scalpers."

I was wondering if you could expand on this. I personally think they are a horrible product and far inferior to futures if you want to scalp. But that is my opinion and perhaps others will disagree with me. Just wanted to hear your side of the debate. Others can feel free to weigh in as well.
 
SPY has better spread than emini S&P, no ?(that's what I read on this site)

Is SPY an EFT ?





P.S. Excuse me for interfering with my question.
 
Quote from Peternam:

SPY has better spread than emini S&P, no ?(that's what I read on this site)

Is SPY an EFT ?





P.S. Excuse me for interfering with my question.
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Well, yes and no. I was referring to the "leveraged" double and triple ETF's he was referring to.

But on the subject of SPY, the e-mini is a far superior product both cost wise and tax wise. I don't know of any reputable prop firm in the Chicago area that trades SPY over ES outside of doing arbitrage related stuff.
 
Maverick:

1. I think the leverage EFTs are better for scalping because the people in there are not experienced, and it easier to catch the new fish.


2. I find that bond futures are good for scalpers, but may be newbies do not know what they are.

PS: Did you read my offer on the other thread "Would this work"?
 
I would like an explanation as well, and not in the form of an excuse. Of course saying one product over another is completely subjective to interpretation, but having scalped products under both classifications, I simply can't agree with the advertisement.
 
Quote from Maverick74:

Well, yes and no. I was referring to the "leveraged" double and triple ETF's he was referring to.

But on the subject of SPY, the e-mini is a far superior product both cost wise and tax wise. I don't know of any reputable prop firm in the Chicago area that trades SPY over ES outside of doing arbitrage related stuff.
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I know that tax wise ES is better, and it's more of a "real" product than a derivative (SPY follows ES), but how is it better cost-wise? I don't trade ES, but my understanding is that you can't get below a few dollars per round turn because of inane CME fees. SPY has highish SEC fees, but with modern day sub $1/1000 trading fees, and ECN rebates as well as venues that pay you to take liquidity, I would imagine buying/selling 500 SPY costs less than buying/selling 1 ES. What's a typical cost associated with a single roundtrip (assuming volume discounts, etc) of a single ES contract? Thanks.
 
Quote from NY0BScalper:

I know that tax wise ES is better, and it's more of a "real" product than a derivative (SPY follows ES), but how is it better cost-wise? I don't trade ES, but my understanding is that you can't get below a few dollars per round turn because of inane CME fees. SPY has highish SEC fees, but with modern day sub $1/1000 trading fees, and ECN rebates as well as venues that pay you to take liquidity, I would imagine buying/selling 500 SPY costs less than buying/selling 1 ES. What's a typical cost associated with a single roundtrip (assuming volume discounts, etc) of a single ES contract? Thanks.
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No way. First of all, I'm using Don's rates since he is advertising this and they charge .0050 to .0030 for stock. So that's $3 to $5 per 1000 shares of the equivalent of a one lot in the mini. Most prop firms are seat holders and pay .35 or so in exchange fees and maybe another .10 on top of that. Let's say they pay .60 RT all in per RT compared to $3 to $5 per Don. That's a huge difference.

Plus the slippage is bad. Yes, the market is a penny wide but if you have a stop order in you can get bad slippage on fast moves. The mini is much deeper and the fills are better. And then of course assuming you are profitable there is a roughly 15% edge in tax.

But my comments were geared more towards the double and triple leveraged ETF's that have awful fills and insane slippage.
 
Quote from tradingjournals:

Maverick:

1. I think the leverage EFTs are better for scalping because the people in there are not experienced, and it easier to catch the new fish.


2. I find that bond futures are good for scalpers, but may be newbies do not know what they are.

PS: Did you read my offer on the other thread "Would this work"?
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I don't know what fish you are talking about. Both products are heavily arbed and they stay in line with each other. One is not really easier or harder then the other except maybe the fact a smaller trader can scale better in the SPY.

TJ, I honestly did not understand your offer. Don't re-post here as I want to keep this thread on topic. But if you want to re-post it there, go ahead.
 
Mav,

Probably best to get an excel cost matrix seeing as comish is different for everyone... since this debate can last forever...
 
The benefit of the leveraged ETFs over futures resides in the decay over time associated with the periodic rebalancing (I believe that it will be going from daily to monthly at some point in the future). This legislative mandate will weaken the edge associated with trading leveraged ETFs. Nonetheless, it will still be in effect, especially during times of high volatility.

Walt
 
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