Citi CIB offers a Universal account and commish similar to IB? Sign me up (as a backup broker at least). I'll pm you as well, King. EDIT: maybe you meant just a futs account...
Futures (Eurex and Asian including Kospi), US, Australian stocks all from a single account in the base currency of your choice ? API ?
Hmm. I know next to nothing about trading options. How would someone with a very short time horizon, who trades a few times during the course of an average day in either direction, safeguard his trading from such occurrences with options? I suppose it might involve buying both calls and puts but, as I said, my familiarity with options is negligible. How, specifically, might such a trader employ such a safeguard in a cost effective manner, keeping in mind that he does not necessarily have an overriding directional bias from one day to the next, or even from one intraday trade to the next?
"Hmm. I know next to nothing about trading options. How would someone with a very short time horizon, who trades a few times during the course of an average day in either direction, safeguard his trading from such occurrences with options? I suppose it might involve buying both calls and puts but, as I said, my familiarity with options is negligible. How, specifically, might such a trader employ such a safeguard in a cost effective manner, keeping in mind that he does not necessarily have an overriding directional bias from one day to the next, or even from one intraday trade to the next?" I've switched to strictly trading index options and my tendency has been to wait until I can determine if there's a big move coming. This usually tends to happen when there's been a long quiet period or some big news is coming and then I'll buy a call and put. Then I hold both positions open until I do develop a directional bias before closing. The management is that if the system does go down for an hour or 2 at least I'm covered with both a put and a call. If I've sold one of the two sides then at least my biggest loss possible is limited to the cost basis of either the long call or put. Unlike a stock which could theoratically drop to 0.
Yes, but I'm not looking to change the way that I trade. I'm only wondering how the use of options could possibly provide a cost-effective safeguard against the occurrence being discussed for the manner of trading that I described in my previous post. I don't quite see how it can but, as I said, I don't trade options and know little about them. I'm all ears.
Ah sorry about that. If your time horizon is just a few minutes then I don't see how options could help you much if you are hedging a long position. (i.e. you're buying/shorting shares of goog and then closing the position a few minutes later but want to limit your loss in case of a system failure). For an inexpensive stock like GE or Intel you could simply enter an order to buy a cheap .05 put when going long a 100 shares to protect you somewhat or do the opposite if you go short the shares then buy a .05 call. The only effect this would have is that if once you go long/short the shares and the system goes down for a while at least you are somewhat protected at a minimal cost.
I think the use of options as a protective tool in case the system went down would be ineffective and cost prohibitive. First, you have to pick an option. If you pick one far out of the money to keep the cost down, it won't move much with your stock and/or index. If you pick one close to the money or in the money, you're going to pay through the nose for protection, plus the bid/ask is going to an issue as well. Some B/A spreads you can drive a truck through. You might be able to mitigate some of these issues by not closing out, simply leaving them open to be there as you trade. This doesn't change the issues mentioned above. But now, if you picked in the money or at the money, you're going to be impacted by time shrinkage of your option premium. Far out of the money won't shrink as much of course because it's premium is smaller, but it's not going to move much to offset your position. I know guys who trade straddles. They adjust their underlying position against the straddle. But I don't think this is what you're looking to do, and this becomes an entire method of trading all on it's own. Frankly, the cheapest way of protecting yourself against a system failure is to have a backup account. This requires you to deposit some money in another account. That money is going to sit idle, but you're only going to lose the use of it. You won't be losing premium as you would with an option position. The scenarios where options might come into play would be overnight calamities, which I assume you're not risking the overnight thing. And, there could potentially I suppose be an intraday calamity that caught you unaware. I mean, we can think of a scenario which might leave you unprotected somehow, and unable to use your backup. The possibility of this type of event can mostlly be protected through stops which are native to globex, although I would imagine we can think of something that could happen where your stop might not be elected, and you couldn't use your backup account....like Globex going down. Either way, I don't think use of options is cost effective. Just my opinion. OldTrader