Every move in them on a 3 minute chart, or sometimes even a 1 minute chart. Every tick in the sp and nas futures, will have a corresponding move in the largest cap stox, especially the tech ones. So if hte nas futs go up 10 pts really fast, you can expect mu to go up a dime, maybe 20c. That's what you're then looking to take if you were playing mu on the futs movement. Even though mu isn't a nas stock, it will move with them more than the sp's just cause it's a tech, and in the sox, but I could have used the example of amd, mu, mot, aol, emc, txn, hwp, ibm,nok, nt, lu, cpq, gtw, glw, nsm etc. That's just the tech ones, most other stox will move with the futs also, but a wmt, won't move as fast, cause there aren't as many trader types looking for the next quarter point. That's why I prefer the tech ones, and a few nontech names for this type of thing just b/c I know I can put them out quickly on island. I don't play this strategy all that often honestly, just b/c I think there are better opportunities out there than fighting for dimes. But if you wanna swing 5k at a time. It's usually worth it if you can catch that .15 or so if the specialist is slow.
Please excuse my ignorance p but when you say "futures" are you referring to the Nasdaq index, the S&P index, the SOX index, etc.? Or, are you referring to something else? I want to make sure I am keying on the best leading indicators. Regards
im talking about the s & p futures, and the nasdaq futures. There are only 2 equity futures i think until they start trading single equity ones later on. You can use the nasdaq 100 or the sox, or any other large indicator, but they all lag to an extent.
Proetarian2 mentioned using market orders in NYSE trading for price improvement, and gauge the supply/demand of the stock. I have been trying this these days and it works well, today I even tried to use 100 share lots to test where it gets filled to decide what I should do on the meat of the position. My question is, how come market sell orders are not filled at the bid, like on the Nasdaq. What is the purpose for the specialist even to post that bid? Today I have several 100 share lots market sell orders filled at the ask. This is quite a different mindset for someone who has been doing Nasdaq for the past year and just recently switched to NYSE. (It was an accidental switch, due to IB's stop order problem with Naz... so far I am very glad I made the switch). Thanks to Proetarian2 and rtharp and others for their insightful posts.
if it's filling on the offer, it's probably going higher, or the specialist is selling there and to sell there, he has to sell yours there also. It depends on the situation.
They are also filled at the bid. As I've been there a few times. Just depends on where the specialist wants the stock to go. Today was rather nice. I was trading KKD again because of the huge volume increase. I was long at 74.45 today. I don't have ticket charges because of how Echo is structured so I peel into and out of positions. I started to dump positions at 75.69 , 75.83 , 76 , 76.48, and the last part of my trade I exited at 76.75. The sell order that was filled at 76.48 was done when the inside bid was at 76.3 and the offer was 76.45. I offered 76.4 and due to the specialist moving the market up more got 76.48 (hey I can't complain better than the inside bid/ask but that was because quoted amount was already filled. The last trade of being filled at 76.75 was also better than the offer. I used a limit of 76.5 and was perfectly happy to be filled at .75 Someone had too many orders to fill so he got sloppy. I'll take an extra .25 on 300 shares and an extra .08 on 200 shares. Always nice to have. For reference the low of KKD today was 73.9 and the high was 77.10 I got in when I saw a huge amount of volume again today. This used to trade NASDAQ but I wouldn't touch it, now that it trades NYSE --I've had 2 days of profit from it. Doubt I'll trade it again soon, on to another stock with a high probability pattern. rtharp
MJT I missed this post but I'll respond now. Yes the specialist is the same guy or girl day after day. It is even possible to tell when his clerk is handling the orders because he went to lunch. I know a few traders who take advantage of the clerk because he has no idea what is going on. I know a trader took the a specialist for over a million in about 4 months with the use of bullets.(something that allows professional traders to short without declaring a short order, or needing an uptick_) He used to wait for the stock to be up 7 or 8 points and sell 500 shares at the market, he then sell another 500 shares at the market. When he was net short 1000 shares he would pummel the specialist with sell orders of 100 lots. Unlike NASDAQ where they would all pile up in Island as one order they show up on the specialist screen as seperate orders. He would sell 50-70 times. Causing the stock to get killed as others would cover and a selling frenzy would happen. While the stock was still feeling selling pressure a few points later he would cover his bullet by buying 6000 at the market. Making 2 1/2 points on about 3000 shares averaged, on the same specialist each day for 4 months. Not bad. The specialist couldn't handle this type of orders and this behavior was able to be repeated every single day for 4 months. That should answer your question. Needless to say A new specialist is now around at this post, he won't get taken by this technique. (some others will but it takes capital and guts to do this strategy) rtharp
That's an interesting story. Do you know which stock. It is almost the same guy every day. But often on low volume days, july 4, new years, jewish holidays, you can really beat up because the clerks are all doin the stocks.
I didn't post the stock because it doesn't work with him anymore. They changed the specialist soon after the specialist complained about the trader. (How often do you hear about that?--usually it is the other way around) For everyone's amusement it was IBM. rtharp
Very interesting story regarding bullets. Isn't dangerous to short in size of a stock thats up 5 or 6 points on a day. I know several people that got burned doing things like that. But seems very interesting the way he did it. Around holidays I have lots of trouble executing any more than several 1000 shares at a time? Is soemthing wrong with me?? Also wanted to comment on EMC and IRF mentioned earlier. I used to trade EMC extensively and made a good chunk when it dropped from 70's to 30's or 40's. IRF hardly trade not enough volume these days.