TNO-MikeG (Apr 16, 2002 4:31:13 PM)
Welcome to the Terra Nova Online chat session.
TNO-MikeG (Apr 16, 2002 4:31:32 PM)
Please feel free to voice any questions, concerns and/or comments.
TNO-MikeG (Apr 16, 2002 4:31:50 PM)
As a brief introduction, Terra Nova is a direct access brokerage firm providing
traders with some of the most sophisticated trading tools designed to help you
succeed. Developed by Townsend Analytics, RealTick ®is our fully customizable
platform, which provides the information you need to trade at your fingertips.
TNO-MikeG (Apr 16, 2002 4:32:08 PM)
RealTick features include real-time charts with statistics, comprehensive news wires, Level II data, and much more. Our commitment to innovative technology and exceptional support has kept us at the forefront of online trading.
TNO-MikeG (Apr 16, 2002 4:32:18 PM)
This material was prepared for general informational and educational purposes only and should not be construed as investment advice.
TNO-MikeG (Apr 16, 2002 4:32:41 PM)
Terra Nova is not soliciting any action based upon this material, and it is not to be construed as an offer to buy or sell any futures contracts. This material is based upon information generally available to the public from sources believed by Terra Nova to be reliable, but Terra Nova makes no representation that it is accurate, complete or current or that the returns indicated in the example transactions will be achieved.
TNO-MikeG (Apr 16, 2002 4:33:08 PM)
An investment in futures contracts is speculative, involves a high degree of risk and is suitable only for persons who can assume the risk of loss in excess of their margin deposits. The high degree of leverage that is often obtainable in futures trading can work against you as well as for you and, as a result, can lead to large losses as well as gains.
TNO-MikeG (Apr 16, 2002 4:33:20 PM)
If you purchase or sell a futures contract, you may sustain a total loss of your initial margin funds and any additional funds that you may deposit to establish or maintain your position.
TNO-MikeG (Apr 16, 2002 4:33:31 PM)
If the market moves against your position, you may be called upon to deposit a substantial amount of additional margin funds, on short notice, in order to maintain your position.
TNO-MikeG (Apr 16, 2002 4:34:09 PM)
If you do not provide the requested funds within the prescribed time, your position may be liquidated at a loss, and you will be liable for any resulting deficit in your account. Under certain market conditions, you may find it difficult or impossible to liquidate a position.
TNO-MikeG (Apr 16, 2002 4:34:18 PM)
You should carefully consider whether futures trading is appropriate for you in light of your investment experience and objectives, financial resources and other relevant circumstances. Changes to the assumptions made in the example transactions may have a material impact on any returns detailed in such examples
TNO-MikeG (Apr 16, 2002 4:34:28 PM)
Transaction costs are not included in the calculation of the returns of the example transactions. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS, AND LOSSES ARE POSSIBLE.
TNO-MikeG (Apr 16, 2002 4:34:36 PM)
Terra Nova Online is a division of Terra Nova Trading, L.L.C. RealTick is a
registered trademark of Townsend Analytics™ Ltd. All securities and futures
are offered by Terra Nova Trading, L.L.C., member NASD, SIPC, NFA & PCX
TNO-MikeG (Apr 16, 2002 4:34:54 PM)
Hello and thank you all for joining us today.
TNO-MikeG (Apr 16, 2002 4:35:14 PM)
This afternoon we are going to discuss Futures, specifically dealing with the contracts Terra Nova currently trades --
TNO-MikeG (Apr 16, 2002 4:35:26 PM)
the E-mini NASDAQ 100 and E-mini S&P 500 contracts.
TNO-MikeG (Apr 16, 2002 4:35:55 PM)
With between $11-13 and $4-5 Billion in average dollar daily volume in the E-mini S&P 500 and E-mini NASDAQ 100 respectively,
TNO-MikeG (Apr 16, 2002 4:36:08 PM)
Terra Nova displayed its commitment to active traders by being one of the first firms to offer futures along with equities trading all in one platform when we rolled out Futures Trading earlier this year.
TNO-MikeG (Apr 16, 2002 4:36:21 PM)
Now you can trade stocks, options, and futures all with one firm and through one platform, RealTick.
TNO-MikeG (Apr 16, 2002 4:36:37 PM)
We will start with a brief introduction to the E-mini contracts and trading Futures through Terra Nova and then open the floor to questions.
TNO-MikeG (Apr 16, 2002 4:36:57 PM)
The E-mini S&P 500 and E-mini Nasdaq-100 stock index Futures are smaller versions of the stock index futures contracts.
TNO-MikeG (Apr 16, 2002 4:37:11 PM)
The "E" stands for electronic and "Mini" refers to the smaller
size of these investment tools.
TNO-MikeG (Apr 16, 2002 4:37:34 PM)
They are one-fifth size of their institutional pit traded counterpart, the Full
Contracts(ND & SP) which are trades on the floor of the Chicago Mercantile Exchange.
TNO-MikeG (Apr 16, 2002 4:38:08 PM)
One contract of the S&P 500 E-mini is equivalent to 500 SPY - spiders.
TNO-MikeG (Apr 16, 2002 4:38:44 PM)
And one contract of the Naz 100 E-mail is equivalent to 800 shares of the QQQ.
TNO-MikeG (Apr 16, 2002 4:39:08 PM)
They are highly liquid way to trade stock indexes with recent daily volume averaging 350,000 contracts for the S&P 500 (ES) and 250,000 for the E-mini NASDAQ 100 (NQ).
TNO-MikeG (Apr 16, 2002 4:39:19 PM)
Last week, in fact, the E-mini S&P 500 contact set back-to-back volume records.
TNO-MikeG (Apr 16, 2002 4:39:28 PM)
On Wednesday it surpassed 400,000 contracts for the first time ever, trading 417,351 contracts.
TNO-MikeG (Apr 16, 2002 4:39:37 PM)
The next day it then broke this high by trading 435,039 contracts Thursday
TNO-MikeG (Apr 16, 2002 4:39:50 PM)
Why have they grown in popularity?
TNO-MikeG (Apr 16, 2002 4:40:06 PM)
Some reason may be that they provide a way trade actively traded stock indexes,
TNO-MikeG (Apr 16, 2002 4:40:16 PM)
it has allowed some a way to hedge their portfolio or other investments,
TNO-MikeG (Apr 16, 2002 4:40:26 PM)
and it also is a way to gain broad market exposure, at relatively low cost.
TNO-MikeG (Apr 16, 2002 4:40:43 PM)
Commission’s are relatively low with E-mini trading and there are low margin levels on these contracts.
TNO-MikeG (Apr 16, 2002 4:40:55 PM)
The current dollar value for E-mini S&P 500 is $55,000.00, but the Initial Margin is only 7% or $3938.00 and the Maintenance Margin is $3150.00.
TNO-MikeG (Apr 16, 2002 4:41:06 PM)
For
E-mini NASDAQ 100, the current dollar value of the contract is $27,060 with an Initial Margin around 15% or $4125.00 and the Maintenance Margin of $3300.00.
TNO-MikeG (Apr 16, 2002 4:41:25 PM)
The minimum dollar amount needed to open a futures account with Terra Nova is $15,000.
TNO-MikeG (Apr 16, 2002 4:41:34 PM)
Commission rates start at $6.00 a contract and can be adjusted with volume and trade history.
TNO-MikeG (Apr 16, 2002 4:41:49 PM)
Order entry is the same as on stocks, through the MarketMakers window, and all
you have to do is select the Futures account and the CME route.
TNO-MikeG (Apr 16, 2002 4:42:45 PM)
At this time we would like to open the floor to questions you may have on Futures, the E-mini's, or Terra Nova in general.
Cdntrader (Apr 16, 2002 4:43:23 PM)
will you be offering daytrading margins?
TNO-MikeG (Apr 16, 2002 4:44:03 PM)
Cdntrader - most likely we will offer that in the future. We would like to see the Customers trade history first.
Cdntrader (Apr 16, 2002 4:44:51 PM)
what would commissions be on 2500 contracts per mth?
zcar (Apr 16, 2002 4:45:14 PM)
will you hold stops in house or at the globex?
TNO-MikeG (Apr 16, 2002 4:46:10 PM)
With that rate we would certainly try to provide the best rate we could - we would have to discuss these type of questions one on one Cntrader.
Cdntrader (Apr 16, 2002 4:46:39 PM)
so there's no set schedule..ok thanks
TNO-MikeG (Apr 16, 2002 4:46:58 PM)
zcar - we only accept day orders.
JayS (Apr 16, 2002 4:47:09 PM)
I trade bonds/notes on a/c/e, does TNO plan on offering a/c/e contracts?
Cdntrader (Apr 16, 2002 4:47:12 PM)
i think he means intraday stops
zcar (Apr 16, 2002 4:47:42 PM)
only buy/sells lmt or Mkt? no stops?
Cdntrader (Apr 16, 2002 4:47:45 PM)
are stops held on tn servers or globex servers?
TNO-MikeG (Apr 16, 2002 4:47:56 PM)
Yes - we will be looking into this in the Future. The connect to the Board of Trade is currently in developement.
TNO-MikeG (Apr 16, 2002 4:48:34 PM)
Stops are held on Globex during the day - as day orders.
Cdntrader (Apr 16, 2002 4:48:49 PM)
both mkt and limit stops?
zcar (Apr 16, 2002 4:48:49 PM)
ok thanks
JayS (Apr 16, 2002 4:48:58 PM)
sounds good, i've heard its a difficult connect, best of luck :)
TNO-MikeG (Apr 16, 2002 4:49:24 PM)
Globex only accepts Stop Lmt orders and that is all we offer.
zcar (Apr 16, 2002 4:49:25 PM)
will you offer OCO orders?
Cdntrader (Apr 16, 2002 4:49:39 PM)
ummmm
zcar (Apr 16, 2002 4:49:59 PM)
OneCanceltheOther?
TNO-MikeG (Apr 16, 2002 4:50:13 PM)
One Cancels the Other or OCO - is not currently available but it is in the works.
zcar (Apr 16, 2002 4:50:22 PM)
ok thanks
TNO-MikeG (Apr 16, 2002 4:52:03 PM)
JayS - you can also trade Bonds via the Terra Nova Trade Desk.
TNO-MikeG (Apr 16, 2002 4:52:25 PM)
cash bonds that is.
TNO-MikeG (Apr 16, 2002 4:52:59 PM)
btw - I'm sitting next to a floor trader on the CME, Jeff B. and if you have questions for him please feel free to ask.
bprice (Apr 16, 2002 4:53:05 PM)
can you take us through a typical trade..say you buy one contract e-mini nas 100 ..it moves 5 point s in your favor..etc
Cdntrader (Apr 16, 2002 4:53:59 PM)
so your saying if I set a stop limit order and the mkt gaps beyond my limit that i won't get filled?
TNO-MikeG (Apr 16, 2002 4:55:33 PM)
That's right Cdntrader - that is correct.
ChatMaster (Apr 16, 2002 4:55:46 PM)
Are there any fundamtental differences between the way the emini Nas 100 trades and the way the emini SP 500 trades that new futures traders should be aware of?
Cdntrader (Apr 16, 2002 4:55:50 PM)
yikes
ddefina (Apr 16, 2002 4:56:12 PM)
So no Stop-Market order available?
TNO-MikeG (Apr 16, 2002 4:56:57 PM)
ddefina - the CME globex does not accept Stop - Market orders so we do not either.
zcar (Apr 16, 2002 4:58:26 PM)
Got to run, TNO-MikeG, thanks for your time to answer questions
TNO-MikeG (Apr 16, 2002 4:59:19 PM)
ChatMaster - the E-mini Nasdaq 100 is typically more volitile than the S&P and has a smaller tick size.
TNO-MikeG (Apr 16, 2002 4:59:37 PM)
E-mini Nasdaq-100 = .50 index point, or $10.00 per contract.
TNO-MikeG (Apr 16, 2002 4:59:46 PM)
E-mini S&P 500 = .25 index point, $12.50 per contact.
igliz (Apr 16, 2002 4:59:57 PM)
cdntrader-This is the CME member. If the mkt gaps past your limit you will not get filled. Yet, in the normal market hours this is not liikely to happen if you have given yourself any kind of space on the limit. Mkt size is typically 200 contracts bid and offer with 1000 contracts bid and offered in the next 5 ticks in either direction.
Cdntrader (Apr 16, 2002 5:00:28 PM)
well i recall a little 300 pt day last yr that would defy that logic;)
TNO-MikeG (Apr 16, 2002 5:00:57 PM)
This is balance a little by the fact that this contract is only 1/2 the dollar value of the S&P 500 E-mini. E-mini Nasdaq-100 contract = $27,060.00.while the E-mini S&P 500 contract = $55,000.00
Cdntrader (Apr 16, 2002 5:01:26 PM)
ib has simulate mkt stop orders that will go off at current prices
Cdntrader (Apr 16, 2002 5:01:33 PM)
simulated
igliz (Apr 16, 2002 5:01:45 PM)
Yes, if you get a big market news, anything is possible. But if you are wrong when news comes out you are wrong and not going to be able to do much about it.
Cdntrader (Apr 16, 2002 5:01:46 PM)
that is why i ask
igliz (Apr 16, 2002 5:03:17 PM)
Cdntrader- Yes, but that kind of order is not held at Globex but at IB. In that case it will get to the market a bit slower than the stop limit held at Globex.
Cdntrader (Apr 16, 2002 5:03:31 PM)
does tn offer the ability to offset emini positions in the pit if globex is down?
Cdntrader (Apr 16, 2002 5:04:04 PM)
yes except that limit order may be doa on a gap
TNO-MikeG (Apr 16, 2002 5:04:51 PM)
Currently no, but if Globex was down for a longer term than we would be able to do this for liquidation only.
Cdntrader (Apr 16, 2002 5:05:39 PM)
what's a "longer term"
TNO-MikeG (Apr 16, 2002 5:06:48 PM)
longer term - would be if it was down for longer than 1/2 hour.
Cdntrader (Apr 16, 2002 5:06:59 PM)
ok thanks
TNO-MikeG (Apr 16, 2002 5:07:07 PM)
yw
Cdntrader (Apr 16, 2002 5:07:35 PM)
so i'm screwed for the first 1/2 hr:))
igliz (Apr 16, 2002 5:07:39 PM)
As an active trader, I like to monitor the risk of my own positions and do not use stops. I realize this is not always possible.
tymjr (Apr 16, 2002 5:07:48 PM)
Any planes to create an artificial stop order using some sort of extremely wide collar. Although officially a stop limit it effectively operates much like a stop order. This type of order can be sent directly to Globex.
igliz (Apr 16, 2002 5:09:21 PM)
Cdntrader- Well if Globex is down everyone is screwed until it restarts or they start pit trading of EMinis
Cdntrader (Apr 16, 2002 5:09:49 PM)
not when u can ofset 5 eminis with 1 large
Cdntrader (Apr 16, 2002 5:10:26 PM)
they are fungible
Cdntrader (Apr 16, 2002 5:10:59 PM)
do you trade for yourself igliz? how about a typical day in the pit?:)
igliz (Apr 16, 2002 5:11:32 PM)
Yes, exchange members typically trade very short term.
TNO-MikeG (Apr 16, 2002 5:11:40 PM)
tymjr - currenly we have no plans to create an artificial stop order as you mention above.
Cdntrader (Apr 16, 2002 5:12:18 PM)
what kind of strategies do you use on the floor?
tymjr (Apr 16, 2002 5:12:36 PM)
Thank you.
TNO-MikeG (Apr 16, 2002 5:12:45 PM)
yw
igliz (Apr 16, 2002 5:12:53 PM)
Our role is to respond to order flow. Floor traders do not necessarily buy because they want to be long. They will buy because orders are selling. The job is to price it so you won't get run over.
igliz (Apr 16, 2002 5:14:57 PM)
Exchange members enjoy a cost advantage. It is almost as if they buy scrap from the exchange for 10 cents on the dollar and resell for the dollar. This activity is what creates the great liquidity that many futures products enjoy. It is a role that is very often misunderstood.
monee (Apr 16, 2002 5:15:11 PM)
TNO Mike does real tick have the capability of atrailing stop on the e-mini ? Sorry if you answered this question already came in late
Cdntrader (Apr 16, 2002 5:15:48 PM)
so you're just scalping /sreading?correct?
Cdntrader (Apr 16, 2002 5:15:54 PM)
spreading rather
TNO-MikeG (Apr 16, 2002 5:16:10 PM)
monee - no trailing stop available for Futures.
monee (Apr 16, 2002 5:16:29 PM)
ok thanks
igliz (Apr 16, 2002 5:16:39 PM)
Yes. Either way pricing things where you feel you won't get run over.
Cdntrader (Apr 16, 2002 5:16:47 PM)
ok thanks
TNO-MikeG (Apr 16, 2002 5:17:19 PM)
We offer direct access futures using Globex - they currently do not have a trailling stop functionality and I'm not sure if that is something they are even considering.
igliz (Apr 16, 2002 5:17:40 PM)
Most floor traders profits per contract can be measured in cents. The key is they trade thousands of contracts per day.
Cdntrader (Apr 16, 2002 5:17:50 PM)
right
igliz (Apr 16, 2002 5:18:37 PM)
The floor trader's advantage per contract versus the non-members is actually very minimal.
ddefina (Apr 16, 2002 5:19:12 PM)
Igliz--do you carry an inventory (net long/short) or just buy/sell as needed?
igliz (Apr 16, 2002 5:20:34 PM)
And the great advantage of these direct access e-mini products is that the exchange member has no advantage except clearing fees. In fact, when trading from the trading floor, I'm required to use a GL terminal. The data coming over ReatTick over the internet is actually a split second faster than the data on my CME network GL terminal.
TNO-MikeG (Apr 16, 2002 5:21:22 PM)
We will be wrapping it up here shortly - we hope we answer all your questions. Bprice asked earlier about having us walk through a typical futures trade but we did not have time to cover this today. We do however do "Live Trading" on webex from time to time.
igliz (Apr 16, 2002 5:21:47 PM)
I try to be as flat as possible. While I will often have positions, they will typically have some eliment of hedge.
TNO-MikeG (Apr 16, 2002 5:22:19 PM)
Tomorrow we a "Live Trading Session" that is currently full, but if you would
like to join us for our next session please email Sales@TerraNovaOnline.com
TNO-MikeG (Apr 16, 2002 5:22:53 PM)
and just let them know you would like to join us fof the next "Live Futures Trading" session we have.
TNO-MikeG (Apr 16, 2002 5:23:22 PM)
Thank you all for coming. A special thanks to Jeff and Baron for your help.
TNO-MikeG (Apr 16, 2002 5:24:58 PM)
If you have any further questions feel free to call me or send me a private
message.
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