SSFs - Do they suck?

Discussion in 'Financial Futures' started by lindq, Nov 4, 2003.

  1. lindq


    I had been led to believe that SSFs would trade in close relation to the movement of the underlying. That has been promoted as a big advantage over an option.

    However, a few days ago I took a long SSF contract in BAC when it tanked, as an experiment. Since then, the stock has rallied 3 percent and the SSF hasn't budged. In fact, the SSF is actually down (!) slightly. What is particularly bothersome is that the SSF is showing a decent number of contracts being traded, so I don't think it is a liquidity issue.

    I was looking forward to using SSFs on selected stocks. But not after this debacle.

    I'd be interested in knowing of other experiences with SSFs.
  2. What type of spread opportunity would this present you?

    I haven't traded the SSF and am interested in the relationship also.

    Help from anyone appreaciated.

  3. the leaps probably were a better bet. i took on some 06 70s. they have gone from 9.60 to 10.80\11.00.
  4. The only opportunity in more crap product being traded in this market condition is for exchanges, brokers and market makers.
  5. lindq


    I am afraid you're right. Just another reason for somebody to put their hands in my pocket. It never ends, does it?

    For whatever reason, when a stock moves 3% and the SSF doesn't move at all, there is a sucker play. And that really pisses me off.

    Now how do I get a hold of Elliot Spitzer?
  6. lindq. Can't you short the stock, take delivery of the ssf to get the differential spread? There has got to be a mechanism to keep those in line
  7. That's the idea of all these up a whole series of transactions and then call their "products" successful since it created a whole lot of volume for nothin'!


  8. don't you think you should have learned about the price relationship between SSFs and the underlying (ala options) BEFORE you entered a position?!

    Just wondering if (as a trader) you took some (any) reasponsibility for this so-called "debacle"?



    p.s. Who or what "LED you to believe" what you posted? LOL

    Was it a beautiful vixen with a siren song? LOL!!!!
  9. lindq


    Update - at present my underlying BAC is up 2.5% and the SSF is DOWN $45.00 on a single contract.

    And they are expecting trading volume to pick up, with this kind of game?
  10. This looks like free money. Buy the SSF and short the underlying for as much as you can until the SSF starts to move.
    #10     Nov 4, 2003