if you have access to some $$$ and a decent rate (like echo) I have a "lay-up" for you. (lay-up = sure thing) Try to trade bond funds - scalp them half on a short side half on the long try to make 2-3 cents. You won't make much but won't lose much either. The key is the premium and discount of these funds. You must play god and separate the herd. The discount/premium is not always right, but some are clearly weaker some are great !!!! As I said this is low risk and pretty sure. Even if you fuck up and it goes against you for a 1/8 you can wait it out. Must have 500k or more available and very low rate. We used to make 50k-80k a months and since decimalization we abandoned this but you can make much smaller but better than McDonnalds ? The best secret - your overhead is paid from the dividents these pay monthly alone!!! BTW if you lose it's only money if you make send me my royalty
Excuse my slender knowledge of bonds and bond funds, but how do you figure out premium/discount is out of wack ?
andrasnm sounds interesting, where can I find info about- trading bond funds -? any URL ? thanx for sharing eli
ETF's are listed in barrons as discount/premium ,also the yield. some a liquid some are so-so. spread now is tight and it trades when old ladies make their move. The discount/premium to par(asset worth) is just a guide-line. We were trading these and the only problem was if you were too long or too short when bonds moved big. Hence my neutral strategy. There are specialist for all of these (ETF's trade at the NYSE) In the good(old days) the spread was teenies or eights Info is sparse no web-site there are some books as it's booring as 'cat-shit' - no bigmoves just small profits. I even play these just not as a scalp. There are literary hundreds of these so if you are patient and the specialist is decent = $
if you are long/short in equal size and yld% you will make nothing in dividends.you will collect long side/owe short side.Once again the free lunch disappears. The nasdaq site lists etfs but mostly equity funds for foreign exchanges,hong kong-swiss-mexico etc
Good point and good eyes. you vary your strategy and if you are good and you are right - make more. The danger is if you net long 500k and bonds go against you. you can have a 70:30 biast on the long side if bonds are favored. There is a some default risk as some of these ETF are junk or bit above junk rate. I rather eat the dividents now as junk seems a bit risky. Many companies you never think of are on the brink of the abyss (i.e. lucent) I mean risk/reward may not be there anymore.(it's a call you make ) Clearly this was kept as a secret before decimalization. Just that we had run into rate and fund problems before - ironically these are not the concern anymore. Had there be no decimalization I would quit my project and head to Echo in a NY minute.
if (IF) you can make consistent 2-3 cents on volume it's can work. you will be the hero of the firms as you will "produce" commission. I would rather do this where there is a rebate along with 1c or less vig. (firm - may not exist ??????) My point - you are truly using the prop firm for what it's worth; providing capital and structure. For this you need $$$$ not like everybody can do it. But I understand your scepticism and I don't suggest anyone doing it unless you have no other ways of making money in the markets.