I could be wrong about the arb. Because I am thinking, the Dec es simply has to be in line with the Sep es, yet the Dec almost never trades. So I guess the arb neccessity doesn't actually gaurantee liquidity. But for a trader just stating out, this looks like a wonderful opportunity, because everybody is going to be on the same ground floor. I really don't think you will hear the name msft without also hearing what the msft futures are doing. And it won't be long, I can just see it coming, "Futures on the SSF Index". Oh what a tangled web we weave.
I think the ssf is something we all have to watch then to trade. I have seen a lot of marketing with brokers including the one's I know. It's there new marketing strategy to have new traders open accounts. I see a lot of different application with ssf but liquidation and the volume is the biggest problem for all traders and I don't see anything happening. I have recognized that there are only a few new accounts opening for people interested in ssf. I'm thinking the sales and marketing industry are more excited about this market then the trading industry. I think most of us are just going to watch for a while. It is also true that all markets never started with huge volume. I haven't seen any market open with good volume. Those guys who market don't know how to trade. I have never seen a broker that can trade accept for myself.
aw shucks I'm wrong again. Sep and Dec isn't an arb anyway. Or at least not a very close arb. I better go read that link one of these days. Now I'm beginning to have my doubts. I better start reading and getting excited if I want these things to be as big as I say they are going to be.
SSF will be non-fungible for the first 2 years of trading. This is a markeeting ploy to gather order flow by the exchanges. There is 4 players the NQLX, OneChicago, AMEX and ISLD futures. The Peterfy BOX will be trading them if and when they get approval for their exchange. This non-fungibility will hinder general acceptance of the SSF as a trading tool. Every options trader knows that when things are not dually listed, that the spreads are too wide to be profitable.
I believe you can't buy and sell between the echanges. If you buy from onechicago, you have to sell to onechicago. You couldn't sell to AMEX or another exchange even if the price was better.
that's interesting about the fungibility, i hadn't heard that. I also just realized that the contract size is only 100 shares, I had previously thought it was 1000 shares for some reason. I am starting to warm up to this whole idea. At first I thought it was totally unecessary, but now I see it as a real alternative to buying stock on margin and paying interest. My concerns now are with the spreads. If the spreads are much larger than the spread on the underlying stock then they won't make much sense for somebody that is getting 4:1 margin or higher on stocks. But if the spreads are similar to the stock spreads, and they are exempt from the PDT, then they may have a real winner. Oh one more thing, i just read that they can be traded from a regular brokerage account, no futures account required. I guess all you will do is sign a SSF agreement just like an option agreement and then you are off and trading.
You can trade SSF from either a securities account or a comodities account. If you are a rep... either a 3 or a 7 will do for a license. 100 vs. 1000 I thought 100 wold be better, because you can always make 100 into 1000. But you cannot make 1000 into 100. It turns out that because of the commisions it would be more favorable to have SSF represent 1000 shares. But then they would have a commission advantage over options, and they could not allow that.