So it is 'tradeable'. Nevertheless I'd like to know what would be the advantage of trading SPI over other indices and stocks. Especially after I started this thread showing an interest on volatile securities. After all I was asked why I didn't trade this instrument....
It means if you want to do size bigger than what is shown, it will get done by the arbs. Let's say you have 100 contracts to do and it's lunchtime (Aussie time), and the book is only showing 25 or whatever. You can do it in increments, and they'll still get filled quickly. Liquidity is never a concern for me during the day. I don't trade 100 contracts, and I doubt anyone here on ET does neither, but I see the tape and know institutions are trading that size without moving much. 10 contracts is nothing and it is not going to move the market. The arbs will come eat it. They just don't like to show everything, but you will get filled. The action between day session and night session is drastically different. The regular SPi trading hours start at 9:50am Aus time, which is about 4 hours after the equity market close in the States.
the arbs ay? LOL. you must be taking away liquidity and not care about slippage, im talking day trading, we are clearly on a different leaf. im an aussie to by the way.
No, it's not. I said I did it through unhedging option contracts before expiration. Maybe you didn't understand that, but what I meant was that I didn't want that much gamma. The 25 was a hedge, and with SPAN margin, everything offsets each other. So it does not change $625 per tick since each underlying move is offset by the options. That's probably beyond the scope of this thread, so I'm not going to get into it. But the point is that 25 contracts is not hard at all to get in or out of during the day. That's just ant size for the instituitons, who basically do all the SPI trading. And that's why the night sessions are so quiet because the big dogs only trade during the day.
It's just preference. I don't think there are overwhelming advantages or disadvantages. Some people like trading penny stocks. Some people like trading GOOG. Some people like trading the DAX. Some pople like trading soybeans. Some people like trading bonds. But do they really have advantages or disadvantages over each other? I can't really answer for them. But I think it's just a preference and they're just trading whatever they're most familiar with or had been exposed to. If someone is familiar with a particular stock/future/currency/whatever, I'd probably suggest he should stick to that market and just focus on what he knows best instead of jumping around to foreign places unless he has a lot of capital and stamina to learn and follow every market. I thought this thread was about the ASX market, and people were talking about CFDs over there, so I was only suggesting to people who were already familiar with the Aussie market that maybe they oughtta look into trading the index futures instead, which is the SPI. But if you're not following the Aussie market at all or have little or no interest in that market, I don't think the SPI is anything special. It's just another futures market. You still have to put in work, risk money, and pay your dues to learn the game, just like any other market, I guess. I would say it's actually a bit of a disadvantage to trade foreign index futures since we don't get their news on time, and every critical report comes in, not minutes, but hours, late whereas if you trade US markets, almost any report comes out instantly on the internet the moment it's released. Sadly, the only Australian news we get on tv in the States is if it's a bar fight that involves Russell Crowe. I don't even know any other American who knows who John Howard is.
All right then. Now that comes up to my mind, have you ever traded ASX stock via DA? If so can you tell me what's usually the spread and commisions?