Trading for programmers in banks

T

TheGreatGopnik

am wondering whether there are people here who have been in situations similar to mine, pondered the same questions and, if so, what came out of it.

I am a programmer and I work in an IT department in a bank's securities division. I work on systems that traders use, but my job doesn't include interaction with them.

I recently opened a brokerage account with my bank. My primary investment objective was current income: my motivation was that cost of living increases and compensation does not. Commute - which for me is public transportation - just went up by 10%, lunches are costing more, rent is going up by 5% a year - but base salary stays the same and total comp is flat (at best). So I started to buy dividend-paying securities - stocks, preferreds, MLPs, REITs, CEFs - and by now I am getting a few hundred bucks a month in dividends, which helps pay bills.

The question I have is whether I could also do any sort of trading. I think the worst obstacle is a compliance regulation that whatever I buy I must hold for at least 30 calendar days. Now the good thing - or so it seems to me - is that my job gives me access to a lot of market data, which includes both live and historical data for stocks and options. I also have access to analytics libraries. The reason why I say it seems to be a good thing is that I could use that to write scanning or backtesting or even live-testing software.

The question I have is what could I possibly trade and what strategies should I look into. I've read several books on the subject ranging from "Trading for Dummies" to Natenberg's "Option Volatility". That's a lot of information, but I thought there was very little on how would someone go about figuring out what is the right trading strategy for them.

So if anybody was thinking about these things, I'd like to know what you came up with. Thanks in advance!
 
Quote from TheGreatGopnik:

am wondering whether there are people here who have been in situations similar to mine, pondered the same questions and, if so, what came out of it.

I am a programmer and I work in an IT department in a bank's securities division. I work on systems that traders use, but my job doesn't include interaction with them.

I recently opened a brokerage account with my bank. My primary investment objective was current income: my motivation was that cost of living increases and compensation does not. Commute - which for me is public transportation - just went up by 10%, lunches are costing more, rent is going up by 5% a year - but base salary stays the same and total comp is flat (at best). So I started to buy dividend-paying securities - stocks, preferreds, MLPs, REITs, CEFs - and by now I am getting a few hundred bucks a month in dividends, which helps pay bills.

The question I have is whether I could also do any sort of trading. I think the worst obstacle is a compliance regulation that whatever I buy I must hold for at least 30 calendar days. Now the good thing - or so it seems to me - is that my job gives me access to a lot of market data, which includes both live and historical data for stocks and options. I also have access to analytics libraries. The reason why I say it seems to be a good thing is that I could use that to write scanning or backtesting or even live-testing software.

The question I have is what could I possibly trade and what strategies should I look into. I've read several books on the subject ranging from "Trading for Dummies" to Natenberg's "Option Volatility". That's a lot of information, but I thought there was very little on how would someone go about figuring out what is the right trading strategy for them.

So if anybody was thinking about these things, I'd like to know what you came up with. Thanks in advance!
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If you're holding for 30 days, I strongly, strongly, strongly recommend either buying options for protection on position or using a hedged long/short portfolio.

I had a short position in 2008 on which I gained 10% initially but ended up losing 50% because I couldn't get out because of the 30 day rule. You need to have enough cash on hand in your account to where you need to be able to buy a statistically relevant hedge in the event something goes wrong.

The 30 day rule is total crap.
 
i used to be at a bank as a trader so my situation was a little different.

if you have a 30 day rule, it's specifically to prevent you from trading. that's the spirit of the rule. You can find loopholes around it (trading different strikes in options, or trading forwards, etc) but the bank will be watching you and it could be grounds for dismissal or it could affect you in a soft manner ("he spends all his time trading rather than programming").

Where I was, I got questioned by my boss a few times for excessive PA trading. He had a list of all my trades and the amount I had traded. And I never did anything against the spirit of the 30 day rule.
 
You can use your firm's data and "analytic libraries" for your personal trading? It's worth being sure, as you don't get yourself fired in this sort of environment -- it's just not worth it. The shorter-term trading markets have gotten much more competitive over the past few years, anyway. There is less volume and (seemingly) far less inefficiency.
 
Quote from TheGreatGopnik:

am wondering whether there are people here who have been in situations similar to mine, pondered the same questions and, if so, what came out of it.

I am a programmer and I work in an IT department in a bank's securities division. I work on systems that traders use, but my job doesn't include interaction with them.

I recently opened a brokerage account with my bank. My primary investment objective was current income: my motivation was that cost of living increases and compensation does not. Commute - which for me is public transportation - just went up by 10%, lunches are costing more, rent is going up by 5% a year - but base salary stays the same and total comp is flat (at best). So I started to buy dividend-paying securities - stocks, preferreds, MLPs, REITs, CEFs - and by now I am getting a few hundred bucks a month in dividends, which helps pay bills.

The question I have is whether I could also do any sort of trading. I think the worst obstacle is a compliance regulation that whatever I buy I must hold for at least 30 calendar days. Now the good thing - or so it seems to me - is that my job gives me access to a lot of market data, which includes both live and historical data for stocks and options. I also have access to analytics libraries. The reason why I say it seems to be a good thing is that I could use that to write scanning or backtesting or even live-testing software.

The question I have is what could I possibly trade and what strategies should I look into. I've read several books on the subject ranging from "Trading for Dummies" to Natenberg's "Option Volatility". That's a lot of information, but I thought there was very little on how would someone go about figuring out what is the right trading strategy for them.

So if anybody was thinking about these things, I'd like to know what you came up with. Thanks in advance!
More...

You are in a "garbage in.....garbage out" situation.

Do a test. Is the organization that surrounds you going down the tubes and can only afford people like youand pay you what you are being paid?

Dividends as an income mechanism? Get real.

Here is another parallel example that you are looking towards:

Go to the web site lof Larry Conners. See his annualized stuff.

Look at the sales job he is doing (accommodating the whims of airheads in three color combos)

Read his accolades by other airheads.

get out one sheet of paper. Pretend you can solve a simple problem.

Draw he RDBMS elements for price and for volume and for sentiment (in the form of A/D).

remember to first divide the page sides into halves and then to use both sides.

The questions is: what is the fourth half for?

Answer: to put the other three parts together.

Why is the integrated relationship (on one fractal) that each of the three parts have a 1:2 frequency ratio?

You're a programmer. Program the above and sell it for 100 million dollars (non exclusive).
 
Quote from Occam:

You can use your firm's data and "analytic libraries" for your personal trading? It's worth being sure, as you don't get yourself fired in this sort of environment -- it's just not worth it. The shorter-term trading markets have gotten much more competitive over the past few years, anyway. There is less volume and (seemingly) far less inefficiency.
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Please change your handle. Your posts aren't even funny.
 
Quote from jack hershey:

Please change your handle. Your posts aren't even funny.
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Is that what your rambling, occasionally incoherent posts are supposed to be -- "funny"? That would explain a lot. :D
 
Quote from Occam:

Is that what your rambling, occasionally incoherent posts are supposed to be -- "funny"? That would explain a lot. :D
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I was expressing my empathy to you for your mistaken direct correlation of declining volume and less efficiency (in the reverse cause and effect order).

You're heming unt ho'ing makes you a hembog.
 
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