I noticed that some are trading stocks that are aligned in distinct pairs on the opening. I though I would comment that, although ok, you might consider keeping tabs on the other stock during the opening play. This also help with the overall understanding of pairs trading and can lead to more $$ during the day. I think it's pretty odd that many firms are stopping their traders from trading mid-day. I agree that the "slow time' needs to be addressed differently (like looking for pairs abnormalities), but it provides a lot of opportunity (especially during this time of big "news related" movement. Lest the "Bright detractors" think that I am trying to "drum up volume" - I want to point out that trader $$ success is the primary ingredient in a trading firm's success, nothing else. So consider your opening stocks, check out their matching pairs (go to www.market-topology.com) and continue your career during the day. Have a good weekend!!
Great link, Don. Thanks! You should post your favorites (links) list. It's so hard to find "the good stuff" among the huge number of sites out there.
all out at 9:42 10 sets of orders, 3 fills, 2 winners, 1 loss net plus 32 cents probably out a little too quickly on the winners. Also cancelled one potentially nice one due to a 5-6 minute delayed open.
Don, regarding your post of the market-topography link, what is the minimum correlation coefficient that you would expect for a pair to be tradable?
I simply look for a 6 month to 5 year "dollar" differential that stays within a reasonable trough (say $10 for a long term, $3 for the short term). I also look for price crossovers whenever possible. It makes it a bit easier if the stocks actually cross the same $ price from time to time.
Filled on 5, 3 profitable, 2 losers (held TXN too long waiting for a rebound which didn't happen). Net loss about $350.
See previous post... I just took my loss in TXN (lost about 20 cents in it). Oh well, it happens ....
Hey Don - got any pregame comments. What kind of adjustments do you make for the BDO? (bid down open)??? Obviously the sells, if not adjusted will be unfillable because they will be below yest close and the uptick rule.
You're right about the uptick concern, but if we widen out the sells a bit, it won't matter. I am going to leave the SS in, even if they're below yesterday's closing price. Watch the emini's just before the opening...and adjust accordingly.