Why actively trade ETFs?

If no prop firms, what are some of the better retail firms for trading the futures and what type of commish and capital contribution do they require? I assume payout is 100% since its your money.
 
for those that daytrade qqq and spy, why have you decided to trade the etfs and not the e-mini s&p/nasdaq? you are giving up the tax advantages of the e-mini's 60/40 treatment (60% of gains taxed at 20% and 40% at your normal short-term tax rate).
 
here are two simple examples using 2001 tax rates and assuming single filing status:

you have $75,000 of taxable income:

etf: you pay $17,535 in taxes for a rate of 23.38%

e-mini: you pay $13,876 in taxes for a rate of 18.50%

SAVINGS: $3,659

you have $200,000 of taxable income:

etf: you pay $54,814.75 in taxes for a rate of 29.41%

e-mini: you pay $43,060 in taxes for a rate of 21.53%

SAVINGS: $15,754.75
 
Trader 963,

I guess I will take that age comment as a compliment! I'm actually knocking on 30, but just have a baby face I guess.

:D

I will post the ETF order routing article tomorrow. . still working on it.
 
Ubiquity,

While I can't speak for anyone else, I personally prefer trading ETFs over futures because I have more options with the quantity of trading vehicles available. There are many days when the S&P and Nasdaq indexes are choppy and in a tight trading range. However, there are often a few industry specific sectors that are trending nicely, despite the lack of direction in the overall broad market. By trading the respective ETF of that sector, I have more options available with less risk than trading the individual equities. It's just what works for me and our subscribers.

Futures trading is quite popular now and many traders love it. If it works for you, then by all means, stick to it!
 
Originally posted by Tradewinds
I play the Q's and the SMH almost on a daily basis. The Q's liquidity makes them great to play size. The SMH spread and liquidity has greatly improved over what it used to be, and makes it much easier than picking an individual Chip stock to play.
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I totally agree with you! SMH is one of my favorite ETFs to trade. It's great for days when you know the SOX is moving, but are not sure of which one to be in. It reduces your overall risk and trends better than an individual stock. I also like trading BBH and OIH. Traded SWH short on Friday and that worked out nicely too.
 
Originally posted by egildone
Deron,

Have you looked at basket trading? Fidelity just started letting you define your own basket of 5 to 50 stocks and trade them as a single trade. You can allocate each stock by $ amount, #shares, or %. The minimum investment is $10,000.

This allows you to pick the top stocks in the top sectors or short the bottom stocks in the bottom sectors.

I am looking into this. Has anyone traded baskets?

Ed
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Ed,

Basket trading is what I used to exclusively do before ETFs hit the scene. I have since moved away from doing that and gotten into trading the ETF HOLDR instead because it is much easier to manage just one position than a whole basket of them. However, the way Fidelity is doing it sounds pretty good! They are basically allowing you to create a synthetic stock or custom ETF. Just be careful with customizing your own basket because I think the most important thing would be to have the same or similar allocation to what everyone else is watching, including the ETF arbitragers. Otherwise, your percentage moves might not be as solid.
 
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