Anyone care to explain why there's a 22c spread on the NEM (gold) SSF at OneChicago this morning? These SSFs are a joke or what. 22c spread on a $40 stock.
If you're talking about the SSF - it's not a $40 STOCK. It's a future contract on a $40 stock - which isn't the same thing. If there's low volume, you should expect wide spreads - even if the underlying stock has narrow spreads. They keep talking about "record" volume on SSFs - but that's like Amazon talking about "record" profits. Overall volume is still pretty low.
Market Makers are supposed to justify their name and make a market - i.e. provide liquidity with a reasonable spread. Most SSFs have about 6-10c spread. 22c spread is pure theft in all standards. If they'll start to offer reasonable spreads maybe volume will pick up. With these spreads I can't see volume picking up in the next 20 years.
Are there really "Market Makers" in SSF's in the same sense as they are on Nasdaq? Or are there just firms that are trying to "make" markets in them? Difference would be that in the latter, they have no obligation to take specific action to narrow the spread. They're just there to trade them for whatever profit they can.
given the spreads, why trade the ssf's?? leverage? shorting rule? do ssf's have the same tax breaks emini futs do?? Swish