jays5150............do you know if they trade their capital or the firms?...........Thanks...ps...is it offered to everyone, or just traders who have been there a while?
Jay, If you are getting quoted higher rates than IB at a prop firm then I would bet that the firms are not really set up as Prop. but just facilitators. If they quote you $4.80 round trip for minis then they are just trying to get the fees. Look for legitimate prop groups, who offer the real benefits: Training and Lower costs through memkbership! The good ones are extremely selective and the bad ones are just looking for Fee capture. Try talking to: Goldenberg Heymeyer: Chris Heymeyer Resource Trading Group: Mark Schneider: (312) 939-8040 Octagon Trading: Carl Barako Gelber Group: Branko Borcich: (312) 347-5666 Falcon Trading: Jason Stratton: 312 637 7090 In order to take advantage of the Lower rates you will need to become an employee of the sponsoring firm and their is risk in that. Your comp must be a salary plus bonus based on production. Percentage deals usually have some risk due to the firms overall production. Riskless
Thanks for the info! I'm not really looking as I'm fine where I'm at. I was just curious. This is good to know anyway. Jay
This is a very good question: I had a SPY and QQQ trader in my office yesterday and he is going to move to Futures for three very important reasons: 1. If he buys the SPY he needs to lift an offer. The Bid is going to be 7.5 cents lower.(I think I got this right) Therefore he says automatically, he is down more than the bid offer on Minis. If he trades the ES, the bid is right there. LESS SLIPPAGE! He said that it has become apparent to him that the Cash Market leads the Futures and he can use the cash as an indicator rather than the reverse. 2. Leverage: Obvious! 3. Costs: Cheaper with everything considered to trade Futures. I have been hearing the same thing over and over again from Equity Traders that there doesn't seem to be anyone in the market. If they are wrong they get hammered, because all the bids and offers disappear. This is just a cycle right now, but the herd is going into futures. I usually would recommend to avoid the herd, but the retail trader is a Big part of this Herd, so in THEORY if a trader is good, minis are the place to be. I feel like Notes and the Interest Rate curve is a very good alternative. Less herd, but there is going to be great action over the next year. Riskless
You guys think cash leads spoos? I think if anything, its the other way around. When I worked at Bright, every single trader watched the spoos rollover as a major indicator for initiating trades. If the futures lead individual equity trades, it would make sense that they lead the cash index to me. By eyeballing it, I actually don't see much difference. Yeah, I know, a little off topic. Jay
Maybe he was talking specifically about the SPY leading a little bit because so many peple anticipating the futures turning points who are trading the SPY. Also being less liquid then the futures could also cause people to get in a little early to get filled. I don't know for sure but just a thought.
Jay, There is no doubt that a great deal Large futures traders use Cash as an indicator. There is a Fast Cash model that the screen traders use as verification that they are on the right side. I watch it every day and I would bet that if you see it in action, you will agree that Cash moves the Future not the other way around. Riskless
Bloomberg and Telerate offer the DDE Link to the Cash market, but program is a simple Excel spreadsheet. I also believe that Bloomberg is developing this model as an add-on. The Fast Cash model takes all of the Stocks in the Index and assigns a mulitplier to them. It then calculates a Fair value and a Cash equivalent that can be compared to the Future. If you are looking for a turn down in the market, you will try to sell the Future when it is Rich relative to cash. Most of the Electronic traders situated around the S&P pit look at this all day! It is broadcast on boards around the CME floor. Data Integrity is essential and you need to make sure that a big block trade did not trade outside the market. For individual equities, I can still see using the Future as a Guide, but for the ETFs, I think it is backward. Just an onservation!