For equity/stocks: in case you go short you always pay borrowing cost (to the one whom you are borrowing the stock from). In case you go long you only borrow money in case you buy more stock than you have cash in your account. If you don't exceed your account value you are not borrowing money from the broker and thus are you not paying any costs.
Hi all, I have something I would like to hear your opinion on - rolling using spread orders. Do you think using spread orders is benefitial for amatures (like me)? This morning I did roll some of my contracts using spread orders, hoping that I can save some amount of spread cost. However I sensed that I can easily lose more money than I can save, because who I am making deal with is most likely pros. Order price amatures set is tend to be quite arbitrary (might not be a right word here) and the order is filled only when the pros judged it is benefitial for them, no? I saw similar discussion in the past in this thread, and had the impression that some prefers normal orders (sell and buy separately) than spread orders, but have not yet found a method that suits me well. Sorry this is more related to futures trading 101 rather than automated futures trading. I have been looking for resources to learn such basics, but have not been successful so far.
I've also been thinking about this. I've always used outright orders to roll. I looked at spread orders once a few years ago, and in many cases it seemed more expensive than 2 outright orders. I know Rob prefers spread orders, at least for some contracts. I would be interested in discussion of how to determine when to roll with spread orders vs outright.
https://qoppac.blogspot.com/2016/03/diversification-and-small-account-size.html it's been discussed.. My opinion is that if you're executing manually, then you can probably do that, but automating it might be more difficult and the benefit from it doesn't justify the extra coding effort, at least for small and slow systems (I don't do that, my execution layer treats all orders the same).
Thanks tgibson11 and Kernfusion. I am inclined to go use outright orders (I learned a new terminology thank you) until I get a certain level of knowledge and experience.
I agree with this and thus roll using outright orders. The contracts I use are liquid and the close and open orders are literally only seconds apart so I don't think that there will be a lot of price drift (to my disadvantage) when rolling this way.
There are some contracts where using spreads is a massive advantage. An example would be Eurodollar, where the spread market is actually more liquid than the outright. And there are others where it makes no difference or is impossible. If you're going to get filled passively (eg buying at the bid), then two seperate orders will make you higher profits than a spread. If you're definitely going to have the cross the execution spread (eg selling at the bid), then two seperate orders will cost you more (so in Eurodollar, it's quite rare that I am filled passively so spreads are usually cheaper). The market risk of two seperate orders is probably a smaller concern, especially if you do the orders one contract at a time. In the first iteration of my trading system (2014-2020) I used spreads and in a rather hacky way (the whole system was hacky, if I'm being honest!). In pysystemtrade (used for live trading since last year) there is a very nice system of multiple order stacks which handles spreads rather elegantly. But yes, it is much more complicated than if I just used outright orders. However an upside of this is that I can start trading spreads (and flys) as a market, without having to fiddle around with my trading infrastructure. GAT
New identical trading server and backup/development machines now in situ (the mintbox on the top shelf is my old machine, now used for monitoring purposes)
The white cube in the muddle is a UPS ? I'm using APC SMX3000LV with external battery packs, again, a total overkill, just how I like it But that setup has a second function to power up the house in case of power outages.. I've been eyeing the new APC lithium-ion units for about a year now, batteries in them last much longer (forever?), regular acid ones need to be replaced every 5 years, but lithium-ion is still too expensive..