I can't count all the times the wmt prick has had a market of say, .25 x .40 while I have been long and offering the .35 to get out. This prick will print blocks at say 40 or even outside at 45, then print my 1000 at 35, and then contunue to print more blocks at 45. The f-ing prick just put a hundred bucks in his pocket scalping my order, which I believe is against his "fair and orderly market" mantra that he is supposed to follow. If they can clean these crooks out and get them back to printing and filling normal, I might be interested in trading stock again. Until then, staying with futures. 25% the cost with just you, everyone else, and the big single ECN type marketplace. No crook in the middle sticking it to you. I always knew these crooks had a free license to steal from whoever they wanted whenever they wanted. Glad to see they finally pissed off people with muscle, institutional traders who are tired of getting screwed for an extra 10 cents on 20000 shares.
cant disagree with the comment on the wmt thief i have no interest in trading that stock because of him i hope they take a good look at the txn and gs cocksuckers
Intersting comments. I've always thought that volatility is more predictable than the return on the interests themselves. I haven't heard of any intraday indicators of detecting changes in volatility. I've looked at spectral analysis, fourier transform analysis, and kernel fitting. But speculating on volatility, that's an interesting concept. I'd have to research it, but my guess is that volatility is probably more predictable than the return. However, I'm not sure how you captialize on it in a symmetric fashion. I'm simplifying, but you expect volatility to go up you buy options, you expect volatility to go down you sell (write) options. However, trading options to capture volatility is a tricky business, requiring pretty good capitalization, extensive risk management, and is pretty technical. I've done some research done with optimization of parameters based upon the volatility of the market. This is my general outcome. It is hard to develop a trading strategy in a highly volatile market. I offer these as food for thought: (1) Volatile markets necessitate you to making your indicators more sensitive to recent data rather than long range data. If you don't you have two possibilities (i) your P/L has increased volatility. Remember that volatility in the underlying market translates directly into volatility in your P/L. Depending on your tolerance for risk and total capitalization, you may find this psychologically or professionally unacceptable. This may necessitate your taking smaller position sizes, or risking a much higher probability of ruin. (ii) you get a lot of false signals. (e.g. in the long run these average out, but for the day trader they may be fatal for the trade). (2) If you make your indicators more sensitive to the data. This will make your trading strategy hyperactive. However, if you like this type of hyperactive activity. This may be a strategy for you. However, I'm looking at one or two trades per security a day with the possibility or pyramiding up if the trade goes my way. Hyperactivity has the following downsides. (i) increasing your transaction costs (ii) increases your requirement to focus the entire day (e.g. think about peeing into your gatorade bottle). (iii) makes the impact of bad fills even more pronounced (especially when you're trying to cover). (3) Volatile markets usually have larger spreads. This is cool if you're a market maker, or the specialist and have an idea of total/institutional order flow. It might help you scalpers out there. But if you're trying to capture the bid/ask spread, you have more pronounced inventory risk and unless your have massive inventory where you can use options economically to reduce that risk, I personally wouldn't go for a scalping strategy. But scalping seems more of an art/skill, than I have the mental tolerance for. (Off topic: Does anyone buy massive positions in expectation of intraday rally, then scalp the spreads? e.g. wait until a trend develops, put in a 20K bid, and and sell 1K asks on the way up or during consolidation? I'm researching potential setups and exits) Are the possibilities of making greater gains in volatile market? Yes, but risk cuts both ways. If you are highly capitalized, you can ride the waves, take the pain, and take a higher rate of return. However, if you're undercapitalized it dramatically increases your risk of ruin. In my honest opinion, day traders should seek liquid markets with a moderate amount of volatility. You need volatility for significant trends to develop intraday. It's that whole risk/reward ratio thing. I would say a combination of your capitalization and your leverage would determine your appetite your volatility. Higher captialization = greater appetite for volatility. Higher leverage = lower appetite for volatility. However, a more intelligent way to play the volatility game is through options. For example, you can buy/sell butterfly spreads. Buy them if you think volatility is going to increase. Sell them if you think volatility is going to decrease. However, when you buy options you have to eat the time decay, if you sell naked options.... well, there is a reason they're called naked. There used to be guy that used to sell deep out of the money puts. He made a ton of money because deep out of the money puts, are desired by insurance companies, pension funds, and mutual funds, to protect their massive portfolios. However, every time the market crashed he'd get completely hosed, his fund would be come insolvent, and he'd raise money for another hedge fund doing the exact same thing. I think Taleb (of dynamic hedging) buys deep out of the money puts to capitalize on possibility of a market crash, when the market crashes he makes a ton, however, until then he just bleeds money consistently and slowly, patiently waiting for the next market crash. I guess if you're an options player this would make sense. I'm busy trying to figure out how to finish this Master's degree. I digress. I have to work on this program that prices commercial mortgage backed securities. I need to finish it, so I can work on my strategy some more.
That's funny eragasa! Haven't thought about that for a while. The 'guy' you mentioned wasn't just one person. 'Selling teenies' was a very popular strategy back in the days before 'the crash' (1987). 1/16 was the lowest an option could be bid (other than a 'cabinet' bid of .01 cent which was allowed for shorts to close out positions close to experation). One would never expect to get exercized on a put that is 50% away from the market and expires in 3 weeks, so market makers would sell the crap out of them. During the crash there were more than a few options CBOE guys that not only got burned and wiped out, one literally was taken off the floor in a stretcher as the story goes.
Ah, the straw man. Well, let us target our discussion once more...<b>Volatility in the framework of a trading environment is your friend</b>. Else you're left the contra trade of the much better informed fundamental (or dare I say inside information holding) trader. <br><p> Volatility will allow players with less than all the information the ability to make money courtesy of the well informed. Sure, where there's reward - there's risk. But with out the risk, seldom you will find any reward. If you are finding these situations, I flatly reject your submission; I may even incite the ole' academic crutch of: 'you are simply not measuring the risk correctly' if pressed.
How about a massive class action lawsuit by small investors against NYSE and the specialist firms? That will get their attention! Remember when Nasdaq and its Market Makers had to pay back billions to investors? NYSE should get the same deal.
As I said , Volatility for its own sake is worthless. Yes, you must have price movement in order to potentially profit, but without some handle on the nature of the movement, you will lose to costs and spread. Of course, if you understand how the game is played and execute in the right spots, you will welcome volitility. If you get it wrong, you will be blown out. It's all too easy to say that wild price swings are cool, and all too hard to prove mastery over them.