Break-even trading

Discussion in 'Strategy Development' started by mikesmithv, Jul 4, 2005.

  1. There are advantages to making trades just to run up to total number of trades (lower commissions with some brokers, more data channels on IB, etc). So I'm thinking that my automated system can use excess cash when things are slow to make ultra-conservative trades that just make commissions. Ideally this system would jump in and out of positions fairly quickly to stay as liquid as possible. I don't have much experience with intraday strategies so any help would be appreciated. Any ideas? I trade only equities.
     
  2. Do you run your credit cards to the limit monthly, so that you can get their 1% cash back too?
     
  3. this is the most retarded idea ive heard of in awhile. although there was/is somethinf called rebate trading.
     
  4. lol
     
  5. Perhaps I should explain more. I need more data channels on IB to try out a strategy that requires monitoring about 2000 prices at a time, but it's a chicken and the egg thing. My current end-of-day system does not produce enough trades to increase my data channels allotment and I'm not going to get that allotment until the system I want to develop is actually trading.

    What's retarded is probably my thinking that anyone would want to share such a strategy, I'll grant you that. If you could make IB's commissions with some "can't miss" strategy then why wouldn't you scale it up and use an ultra low cost broker to make big bucks. I don't need something that is so scalable, if that makes me sound less retarded :)
     
  6. If you want to make a lot of trades here are a couple of strategies that I have used. I used these strategies to make money, not expressly for making lots of trades to get market data.

    1) Use QQQQ options to create a delta neutral backspread. To do this sell an out of the money call and use the money to buy two further out of the money call. It should be credit spread. If you have about 30 of these spreads you should be able to trade the stock QQQQ in a limited risk environment. You will be long curve as the stock goes up so you could place limit orders at $0.05 intervals(if the stock is at $35.99 you would place sell orders at $36.04, $36.09, $36.14) once you get a fill you would need to buy at least $0.02 lower to make a profit with IB. Keep a close eye on you delta and try to be as neutral as possible.

    2) Buy Calls on GBS futures (German government 2 year bond). Buy about ten of of them. This strategy work better near expiry. Then place limit orders at the next 10 full ticks up to sell GBS futures.(107.110, 107.120, 107.130 etc) When you get a fill place an to buy back a full tick lower, if you get that fill sell again a half tick higher (sell 107.110, buy 107.100, sell 107.105). The next order you place would be to buy again at 106.995 an so on.

    These a just a couple of underdeveloped ideas to get you thinking. I hope this helps
     
  7. You work for Don Bright?
     
  8. Thanks for such a detailed post. I'll have to study that but it sounds like it's on the right track. Thanks!