From my username you can see that I'm new to trading listed stocks. Can someone please recommend a listed stock with tight spreads, good depth and volume, not too much volatility (maybe an average daily range no greater .50 - 1) and tends to track the futures? This is for intraday trading. Thank you.
Depends on which futures your tracking. The S&P are awful for trading most listed stocks (NYSE) try following the Dow Jones Industrials as an index. Don't try trading any indexes or tracking stocks, this is where the real pros play to make money. GE is a great stock but the specialist is a jerk and doesn't give price improvement and takes his time filling orders under 5,000 shares. AMD is a nice slow, thick lumbering stock which seems to follow the SOX with some lag. This would be a good listed learning stock, from the Dow 30 either GE or HPQ, both are thick, have a lot of volume and can move. I've traded nothing but listed for 4 years, unless you have a high tolerance for pain stay away from NYSE stocks over $75 or volume under 750,000 shares per day. While learning try staying with stocks between $5 and $50 with volume over 1,000,000 per day. Another thing, I wouldn't play with to many AMEX stocks, the rules are very different and designed for the little investor to lose.
Im not in any way going to try and minimize the powerful influence of the futures on most stocks, but I would spend some time with a stock that may be more influenced by its own ebb and flow. This way you can get a beat on how the specialist system works and reading the tape. An example might be a stock like MON in the chemical sector
Thank you all for your ideas. I'm going to start tracking all of these on Monday. Any more thoughts out there?
Quote from Merlin: Depends on which futures your tracking. The S&P are awful for trading most listed stocks (NYSE)... Did you mean to say that the NQ/ND and NDX are unrelated to listed stocks? It's my understanding that the SP and ES drive a lot of the moves in the larger S&P components. Isn't that where all the program trading and futures arbitrage that accounts for half of the NYSE volume comes from? Aren't the specialists, in recent months, moving their proprietary interest quotes automatically based on movements in the SP/ES?
Hi. I wanted to try and catch price improvements or gap prints by using envelopes or fishing orders. Any ideas on how much time (full time) it takes to get this down? Anything to watch out for?