Discussion in 'Financial Futures' started by hii a_ooiioo_a, Feb 3, 2003.
Even without the PDT rules, the fact is that the normal 2:1 stock margin is not enough to benefit a whole lot from. That's why I never traded stocks, I used options . . . until October 15, 2002 (Nobody expects the Spanish Inquisition!) And even if I had the Daytrader 4:1 stock margin, still doesn't match the 5:1 on SSF.
Despite complaints about thin liquidity, I personally feel there are advantages to being the only one trading against a market maker, market makers placed there by the exchanges themselves in the hopes of getting these things off the ground. They will fill my orders, because they aren't really there to profit off my trades, at this time, they're there to promote SSF trading. Just like some company that will maybe give out free service of some sort to the first 100 customers. They don't expect to make money off me, they just want to get the business going to attract more customers.
And the possibilities: the simultaneous long and short possibilities are something that can be worked into a strategy. Not necessarily the most obvious of strategies, but some strategies that have a bit of subtlety to them. I'm still working on it . . .
Other advantages: as far as I know, at this time, there are no exchange fees or order-cancel fees or order-modify fees with SSF.
And you know what? Everyone's afraid of trading SSF's because they think the bid and ask are too wide at 8 cents. But if you take my advice, and don't place buy orders at the ask and sell orders at the bid, but place your orders midway, each time someone places an order the bid/ask will be narrower. The more that people start seeing narrower bid/asks, the more willing they will be to start trading them, resulting in more volume, more liquidity, narrower spreads. "Remember: only You can create liquidity!".
Well, I say this, because today I saw QLGC trading with a 3-4 cent spread, it was clear that someone was entering orders (not just market makers). Maybe it was some of you?
Either way, I'm not too concerned, I don't mind trading alone against the market makers. If more people start trading them, and the bid/ask start narrowing with more volume, it's nearly as likely that my orders will get pushed behind others in line. There may be low volume now, but at least I know my order is first line!
Either way, really it seems clear that if you want volume and liquidity to pick up, the only way to do it is start trading them. It's a spiral, the more you trade them, the more they are traded; the more volume is seen on them, the narrower spreads are seen, and the more others will start being willing to get into the game, etc. etc.
What game? I keep forgetting SSF's even exist, becasue I can't think of one good reason to use them (other than shorting on downticks).
The leverage doesn't interest me, so what's left?
No PDT and the leverage allow you to daytrade if you have a small account. Very thinly traded though, it's mostly you against the MMs, and that's a tight spot to be in.
last stop before the war?
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