What is the typical (if there is a typical) spread on the Nasd mini and the SP mini? I just spoke to a broker who told me the ND mini tyically trades with a spread of 2-5 points?!?! Is this accurate, as a spread this wide would seem to me to make it too difficult to profitablly trade intraday. Sorry for the basic questions, but i'm new to the futures side of things.
Thanks for the replies and confirming my beliefs. As i'm new to this, i called a live broker that i know is in the futures business to pick his brain and make sure that my "thoughts/strategy" was logical. He admitted he rarely trades the mini's for his clients, which is why i was skeptical at that info. He also didn't have live bid/offer but was watching it trade and at times the price jumped a full 2 points between trades (so he figured the spread was that wide, i thought that it was more likely late prints). I don't want to bash the broker/firm, but suffice it to say it's not likely a broker anyone here would be trading with (ie- it's a full service firm, charging ~$50/RT, and requires substantial net worth and deposit to get approved for futures trading). I don't mean to imply that people here don't have the net worth required, i just know that they wouldn't likely tie up money with a deposit in an account if they didn't have to.
Are you sure you didn't misunderstand? Maybe they meant to say the futures trade for 2 to 5 ticks about the cash index. That would be more realistic, although untrue also, but accurate much of the time. I have seen times where the futures actually trade below the cash index value for 10 or 20 seconds or so. But the futures seem to trade 1 to 2 ticks above the cash index most of the time, except for market open and close, and other exceptional times.
maybe part of the confusion is that your original question refered to the spread of the ND whereas people responded about the mini. From what I understand the big contract does often have a wider spread and is less liquid. Someone just a few days ago posted about slippage with the big contract being 200-300 dollars. I have never traded the big contract myself... just the mini.
That do Arbitrage from the bigs to the minis it seems to be profitable, yet I also know that you have to show a pretty good presence in the pit to get some good fills for this to be profitable. I have also been told that the oportunity is diminishing litlle by little as time passes....fyi... Comp