SSFs and volume

T

TheGoonior

Does anybody use Single Stock Futures?

I've read that even though posted volumes can be ultra low, liquidity is not really a problem since the market maker simply turns around and hedges with the underlying. Can anybody comment on this approach?

Thanks,
 
Quote from TheGoonior:
....liquidity is not really a problem since the market maker simply turns around and hedges with the underlying. Can anybody comment on this approach?
More...
1) You have to expect that you are giving up some "juice" in order for the market maker to hedge himself advantageously at your expense.
2) With each and every trade of SSF's that you make, you're paying a slight premium and selling at a slight discount compared to if you just traded the underlying stock. :cool:
 
Quote from nazzdack:

1) You have to expect that you are giving up some "juice" in order for the market maker to hedge himself advantageously at your expense.
2) With each and every trade of SSF's that you make, you're paying a slight premium and selling at a slight discount compared to if you just traded the underlying stock. :cool:
More...
I had expected to pay up a bit.
The purpose behind the question was to see if I could find a good alternative method to Puts for trading short in my IRA.
I have IRAs with both IB and TOS, so the SSF method is possible with the IB account.

The spreads on the stocks I watch are pretty comparable between the option and the SSF, so it appears to be a possible alternative.
 
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