I met someone who trades size in cash options at the CBOE pit for a large firm doing the {OEX/SPX/Futures} arbitrage, and I think the same thing on the NASDAQ side including the QQQ and whatever else these guys throw into the mix. I was told there is very, very little retail paper. As a previous poster mentioned the arb was lucrative and now has dried up, as many have discovered the profitability.
there are times when retail can arb, but they arn't often - but it is possible at extreme sell offs in the futures
PointDirex is coming with a software in which you can trade futures and equity on one platform. Now that is awesome.
There are currently a few futures trading firms, not unlike, what the prop stock firms do...I know of one here in Chicago and I am certain there are many other in the CME building...I had considered doing something such as this, but it did not really appeal to me simply because I already have enough capital on my own to cover margin for these trades...Even with a 25k account you "could" trade around 15 minis(although I have never done this myself)...These equity daytrading firms get you in the door because you want the leverage, and perhaps to a lesser degree the technology and the office structure, which admittedly is a very nice feature... Regardless, Don is right as are alot of other people when comparing equities to futures...The futures require another type of skill set, in my opinion, and not that many people do make the transition...You also have to be able to use variable contract sets, etc and there is no real "easy way" to learn them...If you had to cover the overhead of a professional firm and split a percentage of the profits, I believe it would be a surefire way to NOT make money...LEt's face it very few people are making a dime trading the mini's in this current environment, throw in a profit split and some fixed overhead costs and you are just asking for trouble... Just my opinion of course...
We have offered Futures trading for years...it's just that very few of our people think that trading emini's is easier than stocks. My brother and I trade them from time to time, but again, just not a big "edge" to them.
Don While I agree with you, that the learning curve for futures is steeper and far fewer people can "break into" futures, I am not exactly in agreement as far as the "edge" goes... In my opinion, edge has many different meanings..For some it is their system, for others it is their trade management, etc, etc... I do not think that many "pure scalpers" can really make it long term in the e-minis...I know that a small percentage do make it, but the odds are stacked against them...That being said, there are some different ways to manage trades on different time frames to increase the edge...
We don't disagree...and remember, we've been members of the Merc for 20 years (and we did well trading there with various arb systems).