IB posted the fees for SSF would be 1$ per contract...
Will single stock futures replace stocks?
- Thread starter qazmax
- Start date
What is the point ? We already have index futures, and we have options on individual stocks. We have 4x margin buying power even for small retail accounts. If a person wants to hedge a long stock position they can buy puts or sell calls. What problem will these things solve ? Who will want them ?
GeorgeSoros,
Thanks. After I posted it occurred to me I had seen that $1 rate somewhere but I couldn't find it on the IB site. Still, that means $20 RT for 10 contracts versus $15 RT commish for 1000 shares. And I doubt too many other brokers are going to match that $1 rate. As IB says in their ads, your broker's wholesale costs are probably more than what we charge.
Thanks. After I posted it occurred to me I had seen that $1 rate somewhere but I couldn't find it on the IB site. Still, that means $20 RT for 10 contracts versus $15 RT commish for 1000 shares. And I doubt too many other brokers are going to match that $1 rate. As IB says in their ads, your broker's wholesale costs are probably more than what we charge.
I think some people are looking too much at SSFs from a "daytrading only" perspective. As darkhouse pointed out, there is a huge advantage of leverage if you hold overnight (yes some people do!), 20% vs 50%.
I also agree that some people may not be putting enough weight on the fact that you can short on a downtick and avoid getting a borrow in advanced.
I did quite a bit of merger arb before the M&A market dried up, and one of my biggest problems was getting shares to borrow. I'm not a big hedge fund, so I'm not exactly high on the list of who gets the "hard to borrow" shares. Of course, SSFs probably won't trade on the more thinly traded stocks (which were the hardest to borrow) and big stocks like MSFT, INTC etc, well if you're broker can't get you a borrow on those then you need a new broker, lol!
I haven't looked into which stocks initially would have futures, but I'll have to take a gander. This thread has got me thinkin... always a good thing
I also agree that some people may not be putting enough weight on the fact that you can short on a downtick and avoid getting a borrow in advanced.
I did quite a bit of merger arb before the M&A market dried up, and one of my biggest problems was getting shares to borrow. I'm not a big hedge fund, so I'm not exactly high on the list of who gets the "hard to borrow" shares. Of course, SSFs probably won't trade on the more thinly traded stocks (which were the hardest to borrow) and big stocks like MSFT, INTC etc, well if you're broker can't get you a borrow on those then you need a new broker, lol!
I haven't looked into which stocks initially would have futures, but I'll have to take a gander. This thread has got me thinkin... always a good thing
3 1/2 years ago, "Will single stock futures replace stocks?" was actually thought of as a valid question. 
If SSF's were to permanently cease trading tomorrow, most of us probably wouldn't even notice.
If SSF's were to permanently cease trading tomorrow, most of us probably wouldn't even notice.
SSF's will never be a HUGE deal -----unless they get futures tax treatment. They have tried to push this through and could not get this right off the bat. But they are lining this up again.
If the SSF's ever get futures tax treatment of 60/40 ---they will explode in growth. They will have to slip the SSF tax treatment under the rug like they did with Futures back in 1986. But Chicago is very clever. The stock exchanges would flip out over this. However, I don't know if the electronic stock exchanges/ecn's would mind much. I am surprised SSF's are as big as they are now! I don't know anyone trading them.
If the SSF's ever get futures tax treatment of 60/40 ---they will explode in growth. They will have to slip the SSF tax treatment under the rug like they did with Futures back in 1986. But Chicago is very clever. The stock exchanges would flip out over this. However, I don't know if the electronic stock exchanges/ecn's would mind much. I am surprised SSF's are as big as they are now! I don't know anyone trading them.
Big? Total SSF volume averages under 2,000 contracts/day. Volume in options is over 3,000 times greater.
SSF's have flopped. I don't know any SSF traders either. My personal average daily volume in options is many times greater than the entire SSF market combined.
SSF's have flopped. I don't know any SSF traders either. My personal average daily volume in options is many times greater than the entire SSF market combined.
That was a very slow day Reardon! You know that! No need to rub it in! Hehehehe.
Usually, volume is quite a bit higher. Open interest is a million and that surprises the hell out of me. But they do have market makers and you actually can walk in and buy and sell these things. I looked up GM one day not long ago and the SSF market was wide as hell. But you could buy and sell no problem if you wanted to pay up.
Be cool and easy on the SSF. Be nice. IF they get futures tax treatment ---we will all be looking at them.