ahpie, how about just futures on options full stop.. that's what i'm waiting for.. and then we could even have options on those futures..
And while we all fumble trying to trade all of these new derivatives, Metooxx will be sitting back and arbing them all.
Oh crap. There is NO WAY I will pass that silly permission test IB has on trading these babies... I will be too confused, even more than I am now...
I doubt these will really amount to anything though for several reasons. First, you are not going to attract futures traders to them. Why? For two reasons: 1st they already have the exact product trading at the CME in the form of S&P500, Nasdaq100 and Emini futures contracts on both. There is a long history of exchanges trying to take the successful products of another exchange (sometimes repackaged (ie. futures on QQQ), sometimes not) and none of them seem to fly. The original exchange to list the product always wins and the immitation slowly fades away. Next, and maybe even more important, SSFs are going to be taxxed as short term capital gains. You will need to fill out the exact some paper work you do as a stock trader. This means having boxes and boxes full of trading statements to bring to your accountant, and it also means paying a hell of a lot more in taxes because SSFs do not have the 60/40 tax advantage of other futures contracts. What I have seen mostly is that small retail traders are excited about SSF's. Mostly the sub $25K crowd. These traders alone will not make for a very deep market. There needs to be commercial and hedging interests involved, and hedgers will definatly be better off either doing so in the futures or in the QQQ/SPY stock. This is all IMHO of course, but I really don't think these are going to be as big as the hype is right now. I do think there is a place in the world for SSFs, especially in individual stocks and some of the narrow based indexes such as OneChicago is launching (though Narrow Based Indexes have a long history of failing to amount to anything as futures contracts as well). I guess come Friday the picture will start to be painted for us and eventually it will be clear as to what is going to come of SSFs in general and some of the contracts specifically. Brandon
I have seen lots of people talk about how much money they will make doing arbs between the SSFs and the underlying security because there are certain to be wide spreads from time to time. This is probably true, but keep a few things in mind. First, futures and cash do not trade at the same price except on and near expiration. So, purhaps you will see the QQQ at $25, but the QQQ futures at $25.15. Seems like a monster spread that will close, but that probably isn't the case. Also, there are probably a lot of other people with the same idea, many of them are probably using sophisticated computer algorithms to scan each tick in each of these markets for any arb. opportunity and they will probably take them fairly quickly. This is not to say an individual trader won't be able to arb, but just that, IMHO, its going to be very difficult. Brandon
What about SPY futures ? Are they coming too? It maybe wishful thinking but I think futures on ETF's could be successful, all in all I would think more people trade ETF's and ETF's options than eminis if you add retail and institutions together. Hedging and arbing against Q's would be easier 10 contracts instead of 1.25 NQ contract against 1000 Q's right? Commissions could be a problem though $20 RT instead of $5 in case of the 100 share contract . Anyway I certainly hope they will be liquid and active. Can anybody post a link to NQLX products?
http://www.nqlx.com/NQLX/SSF/SSF.stm botton of the page. It states ETF products to be announced at a later date.