prop firm traders...

This is a discussion on prop firm traders... within the General Trading Chat forums, part of the Reception category; groomed lol. wtf is earning the spread. You need to explain this stuff without trader jargon 1st....

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Old May 1, 2009, 6:46pm   #51
Joined May 2008
Technically Fundamental started this thread groomed lol.

wtf is earning the spread. You need to explain this stuff without trader jargon 1st.
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Old May 1, 2009, 6:49pm   #52
Joined Nov 2007
the spread is the difference between the bid and the ask. You can earn the spread by buying on the bid and selling on the ask.
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Old May 1, 2009, 6:51pm   #53
Joined May 2008
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Originally Posted by vinicius View Post
Are you German Aero?

You remind a friend of mine.. Really good person, but he talks too much!

Arabian, Do you trade for a company or for yourself?
I'm actually negroid. Jamiacan/Greek if you want to get pedantic.


I know I talk too much. Check the board at any time 9-5 and see how many threads I've had last post. I find it hilarious.
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Old May 1, 2009, 6:56pm   #54
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omg
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Old May 1, 2009, 7:05pm   #55
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Originally Posted by MrGecko View Post
the spread is the difference between the bid and the ask. You can earn the spread by buying on the bid and selling on the ask.
I didnt understand that at first because I trade CFD.

Can you only do this if you have capital to front rather than trading on margin and DMA?
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Old May 1, 2009, 7:06pm   #56
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Basically, futures markets are made up of price makers and price takers.

Price makers are making quotes to the market - how much they will buy, and at what size, and similarly for selling. Of course, you need someone else to be on the end of your quote for a deal to be done - the price takers.

Now, making a quote does not necessarily mean you will get "filled" (i.e. someone agrees to deal with you); this is the skill in this type of trading.

So, there are price takers, who will just go to market and buy / sell at the best price is available (or vice versa). Then there are price makers, who will quote bids and offers into the market.

As a gross generalisation, price takers are either speculating in the longer term, or are using the contract as some sort of hedge; i.e. they are not bothered about paying a tick or two on their fill, they just want the position. So the objective of a price maker is to quote bids and offers to the market, and do so at the widest possible spread that will get filled.

It is not explained very well but thats the idea anyway.
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Old May 1, 2009, 7:09pm   #57
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Originally Posted by Aaronmalins View Post
I didnt understand that at first because I trade CFD.

Can you only do this if you have capital to front rather than trading on margin and DMA?
Nope, any old idiot can do it. The exchange has specified margins per contract which you have to meet, but other than that it's open for all.
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Old May 1, 2009, 7:29pm   #58
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Technically Fundamental started this thread I thought bids were made on the floors :-S

F-it anyway CFD is fine for someone in my position.

What kind of account do you need to put in bids.
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Old May 1, 2009, 7:30pm   #59
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Originally Posted by KillPhil08 View Post
omg
what?
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Old May 1, 2009, 7:31pm   #60
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Originally Posted by Aaronmalins View Post
I thought bids were made on the floors :-S

F-it anyway CFD is fine for someone in my position.

What kind of account do you need to put in bids.
Most of the activity is electronic.
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