Retail Bullets and Single Stock Futures

Discussion in 'Financial Futures' started by Manrico Scremin, Oct 27, 2002.

  1. Am I correct in thinking that retail traders will be able to create their own resuable bullets by buying the stock and selling the corresponding number of SSF contracts? (For this purpose selling the SSF contract is essentially the same as having a long put and a short call: it obliges the trader to deliver the stock at a particular price at on a particular date.)

    On the other hand, maybe it will be simpler to just trade the SSF and avoid the stock completely assuming there's enough liquidity.
  2. I think that's one of several compelling reasons to consider SSF.
  3. liquidity has been enough of a problem already; seems to me that dividing the market for a stock into two parts will make it even worse. the cheaper commissions will be nice, tho...and (maybe) the ability to keep the SEC even further away from the stock market will be even better...

    of course, there's no reason for the uptick rule anyway. with enough money you can tank any stock you want, upticked or not.

    just my .02
  4. cheaper commissions? you heard something bung'?
  5. lojze


    How far away are SSF's actually? Is it dependable on broker or ...?

    A month, quarter, ...

  6. They go live November 8th. I don't know if it will be highly liquid during the first couple of months but i think there are some compelling reasons to trade SSF's rather than the stock. Due to arbitrage opportunities, liquidity should not be a concern.
  7. SSF commissions will be less than for the corresponding amount of stock. that's one of the benefits of futures pricing...
  8. i'm talking about spreads specifically. you'd think without as many independent traders in a stock, the spreads would widen and give back business to spec's and MM's, which in itself is a bad thing.
  9. but remember the stocks that go live on Nov 8th are those who have tremendous daily volume such as IBM, ORCL, MSFT etc... Again, it is doubtful that liquidity will be thin on these products. Spreads should not be a concern IMO.
  10. lojze


    Thank you Swoop.

    Are SSF's and their start dependable on broker? I have particularry IB in mind.

    Also, where can I find more "practical" info on trading with SSF's?

    #10     Oct 29, 2002