For those who don't have 25K and want to daytrade, you can try QQQ options. It has two advantages: (1) small spread--5 to about 15 cents per contract (2) very liquid. If you have an IB account, it's only $1.95 per contract. As long as you don't trade too many contracts at a time, the commissions will still be reasonable. Of course, this doesn't apply to most stock options whose spreads are usually pretty wide.
For those who don't have 25K and want to daytrade, you can try QQQ options. It has two advantages: (1) small spread--5 to about 15 cents per contract (2) very liquid. If you have an IB account, it's only $1.95 per contract. As long as you don't trade too many contracts at a time, the commissions will still be reasonable. Of course, this doesn't apply to most stock options whose spreads are usually pretty wide.
AAA, the only reason to trade QQQ's over NQ, is that you can trade smaller size. SPY, for instance, is not nearly as liquid as QQQ and I would rather trade ES than SPY.
I started trading the qqq's this year with mixed results. First, I tried to scalp it like a stock and I found there were too many disadvantages 1) You have to be a lot more patient because it makes slower small moves (on a short time frame) 2) There are more technical traders trading the Q's. My execution are isld only unless I have lots over 10k. The biggest advantage imo, is the ablility to short the qqq's on the downtick and the ability to get more size by sweeping the isld book. I love trading qqq's on kneejerk reactions from econ #'s like NAPM, CPI, etc, Rate cuts...etc. Best trade on the qqq's this year was when they announced the Anthraxexposer Case in NYC, got a bunch of fills on the qqq's short and made a nice profit. Would of made more if I loaded the boat on CPHD that day though... Just my two cents.
2) There are more technical traders trading the Q's. It doesn't seem to me to matter what kind of traders trade the qqq/eq. There are plenty of people doing arbitrage, who are willing to take a loss on the qqq/eq side and pass it on to the underlying securities. For those who complain that the qqq doesn't move much, you have 4:1 margin, but if that's not enough, currently the eq gives you aprox. 8:1 margin. voodoo
HI, I never traded the QQQ before , but i will. I have a question, hopefully you guys can help me with it. If i am short 1000 shares QQQ and i want to buy it back and at the same time want to go long 1000 shares. Is it possible to buy 2000 (1000 buy back short and 1000 long) shares, although i have the money for 1000 shares in my account (without margin). If this is possible it saves commissions, if not i have to buy 1000 shares back and at the same time go long 1000 shares ( that's 2times comm.) Thanks
You are assuming that covering and buying are done with the same trade rationale... a pretty dangerous assumption!!