Why do you trade what you do?

jasrlew · Jun 27, 2003

Curious as to why some people only trade currencies versus those that trade only equities or futures, etc. I wonder if certain personalities trade certain instruments. Just curious.

funky · Jun 27, 2003

Quote from jasrlew:

Curious as to why some people only trade currencies versus those that trade only equities or futures, etc. I wonder if certain personalities trade certain instruments. Just curious.

started out trading individual stocks and now i trade ETFs (SPY). i like being able to short on a downtick and like the behavior of the stock as it relates to my strategy. all of my futures buddies think i'm weird. maybe i'll switch to futures some day.....right now i'm just concentrating on trading well and becoming consistent. futures have a tax advantage so that might be good for me when i start making the real $$.

DHOHHI · Jun 27, 2003

Quote from funky:

started out trading individual stocks and now i trade ETFs (SPY). i like being able to short on a downtick and like the behavior of the stock as it relates to my strategy. all of my futures buddies think i'm weird. maybe i'll switch to futures some day.....right now i'm just concentrating on trading well and becoming consistent. futures have a tax advantage so that might be good for me when i start making the real $$.

I also now trade SPY much of the time intra-day. But I still do swing trades in individual stocks. Don't have to do any real homework (TA or fundamentals) trading SPY.

bungrider · Jun 27, 2003

because i am the expert. i am the watcher of smart money. i am not smart money, but someday i hope to be.

and i can short downticks.

spreadem · Jun 27, 2003

I trade ES and NQ because I'm an action junkie !

Dr. Zhivodka · Jun 27, 2003

Why do I trade what I do?

Because of the tax treatment of Futures over Shares and other Cash instruments.

Futures = 60/40 long term/short term cap gains = approximate 22% tax rate before deductions

Stocks = straight cap gains = 35% rate before deductions.

No brainer.

Regards,
Dr. Zhivodka

crazy_trader · Jun 27, 2003

Quote from Dr. Zhivodka:

Why do I trade what I do?

Because of the tax treatment of Futures over Shares and other Cash instruments.

Futures = 60/40 long term/short term cap gains = approximate 22% tax rate before deductions

Stocks = straight cap gains = 35% rate before deductions.

No brainer.

Regards,
Dr. Zhivodka

How did you come up with 22%

$100 60% is tax at 20% (LT) = $12
$100 40% is tax at 35% (using straight cap gains from above) = $14

Total Tax = $26 out of $100

omcate · Jun 27, 2003

Quote from jasrlew:

I wonder if certain personalities trade certain instruments.

You have to enjoy your work to excel. There is a big difference between a job and a career. Hence, successful trader will likely find a style/instrument that matches his/her personality. Just my two cents.

Nana Trader · Jun 27, 2003

I just started forex recently with demo account, and it
is more appealing to me than equity market.

It is easier and faster to get started in forex, but much
more difficult to predict when the right entry is? exiting
trade is easier because if you enter right time, you will
be riding trend for day or two at least.

It is 7 days and 24 hours, totall "trade time" freedom.

Dr. Zhivodka · Jun 27, 2003

Quote from crazy_trader:

How did you come up with 22%

$100 60% is tax at 20% (LT) = $12
$100 40% is tax at 35% (using straight cap gains from above) = $14

Total Tax = $26 out of $100

Long term cap gains is 15% now not 20%

But the overall rate is 23% I was mistaken on the 22%

=(.6*.15)+(.4*.35) = 23%

Still it's a hellava lot better than a 35% tax rate.

Dr. Zhivodka