Why does it seem that good traders go to futures market?

O

ortega

It seems over the last few years of reading and learning about the markets and those who "claim" to be successful, many seem to either have been trading futures from the beginning or have shifted to futures later. I know the obvious advantage of being able to go short as easily as long may be one reason. Also, the leverage is greater, but of course that is a double-edged sword. Is there any other reason that great traders seem to be trading futures rather than equities. Or maybe my assumption is wrong from the beginning?
 
cheaper execution

greater liquidity on the bid/ask relative to a comparable cash market position (typically)

blended capital gains tax treatment for U.S. traders
 
A wider spread is an asset to certain types of trading as well. A quarter point on ES represents .0066% of the daily required margin at IB. 2 cents on a $30 stock represents .001333%, less than a third of that of ES. And, I suspect 2 cents is a pretty wide spread on a liquid issue, say MSFT or CSCO or INTC.
 
Quote from ortega:

It seems over the last few years of reading and learning about the markets and those who "claim" to be successful, many seem to either have been trading futures from the beginning or have shifted to futures later. I know the obvious advantage of being able to go short as easily as long may be one reason. Also, the leverage is greater, but of course that is a double-edged sword. Is there any other reason that great traders seem to be trading futures rather than equities. Or maybe my assumption is wrong from the beginning?
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It's the pure market baby. No screwing with specialists, market makers, inside info, low floats, wide spreads, all the sh*t that can screw up one's return.
 
For those who have traded both stocks and futures, can you apply the same tape reading skills to futures that you used for stocks (obviously, only those who watched the tape for stocks will be able to answer this).

Thank you all for you replies. This site has been a great learning environment for me so far.
 
From what I read here lots go into futures because they don't have enough money to make it worthwhile going into stocks and also the no PDT rule
 
Quote from bone:

cheaper execution

greater liquidity on the bid/ask relative to a comparable cash market position (typically)

blended capital gains tax treatment for U.S. traders
More...

All of the above plus no market makers, no earnings reports, no buy recommendation changed overnight to underperform, no need to folow up twenty or more issues.
Walter
 
Quote from ortega:

For those who have traded both stocks and futures, can you apply the same tape reading skills to futures that you used for stocks (obviously, only those who watched the tape for stocks will be able to answer this).

Thank you all for you replies. This site has been a great learning environment for me so far.
More...

Short answer - Yes!

best

Natalie
 
I see that basically all mention of futures on this board are about ES. Do people mainly only trade the equity futures, or do some of you trade commodities, interest rate, etc?
 
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