The future of Pro firms in the time of SSF's
- Thread starter lojze
- Start date
Ever heard of arbitrage? A lot of pros will be trading the spread between the stocks and the futures. Don't forget that the world of single stock futures is limited to about 100 large caps, and there are considerably more than that yeilding good trading opportunities every day. Limiting yourself to ssf's also removes any edge you might have as a tape reader or taking advantage of exchange rules.
Prop firms still offer the use of capital, which means the trader's buying power is not correlated with his capital.
It is important for the newbie. For example, someone who goes from 50k to 5k and then becomes profitable can get his share size upped quickly, instead of having to rebuild his equity or going bust.
It is also usefull to an experimented trader going through a losing streak.
The high buying power available is also mandatory to make a decent return on some arbing strategies.
I think the prop firms should evolve by providing access to other exchanges. SLK already does this.
There is some money to be made by arbing similar issues, like NYSE ADRs vs The original issues.
Getting price improvement on the NYSE, and then hedging on an European exchange is a riskless strategy, but it is very capital intensive, and would be alot easier from the same interface than by using a trade desk for the Europeans exchanges...
OHLC
It is important for the newbie. For example, someone who goes from 50k to 5k and then becomes profitable can get his share size upped quickly, instead of having to rebuild his equity or going bust.
It is also usefull to an experimented trader going through a losing streak.
The high buying power available is also mandatory to make a decent return on some arbing strategies.
I think the prop firms should evolve by providing access to other exchanges. SLK already does this.
There is some money to be made by arbing similar issues, like NYSE ADRs vs The original issues.
Getting price improvement on the NYSE, and then hedging on an European exchange is a riskless strategy, but it is very capital intensive, and would be alot easier from the same interface than by using a trade desk for the Europeans exchanges...
OHLC