FTSE 100 Intraday - December

[barjon]

yes, I suppose so - any means of trading ftse at its current level
(if there are others, I sb ftse so hazy on anything else )

I take your point about the pros trading a representative group
of ftse constituents but is it that easy? For example I often see
ftse up 1.5%, say, whilst the top 14 constituents languish below
1%. (or vice versa) Seems a bit chancy?

 

[bonsai]

sb's will usually quote you a price which is futures less fair value.
currently about 2/3 points and at expiry will be zero.
Its so close usually to the index that you can trade it in lieu of the index.
Which as you rightly say cannot be directly traded.

But the sb's should be regarded as just another retailer who sets their own prices to facilitate trade.
They will offset their risk by trading either futures or options directly.



What keeps Fair Value about right ?
That is the action of the professionals who will take advantage if
FTSE futures get out of line with FTSE index and vice versa.
Is it easy for them ? Yes !
There are a multitude of ways for them to profit from any discrepancy, very quickly and very profitably.

However I would suggest that you think of the Index definitely having its own supply and demand.
It is the volume of shares on all its constituents. It is in no way independant.

Some of our postings may have led to the confusion ?
I often refer to 'cash market' to differentiate from futures. But it always means the Index itself.

 

[Hooya]

You were all up late last night

 

[bonsai]

ah ! but, which time zone am I in ?

The internet is a funny place ?




PS: Perhaps it was overbought after all ?
lol

 

[Hooya]

You still in the States?, thought you were back in the UK


Test of my wedge trendline at 71 on the cards???There is a lower one at 50 but one at a time


edit:- if you are in the States.....v.early to be trading.

LOL I was watching last night for a possible attempt at a reversal.....but it would happen the 40 mins I wasnt watching. The first ones often a fake break to will see what developes today.

 

[bonsai]

er, well where I was then may not be where I am now ?

Will o' the wisp !

lol

 

[Hooya]

doyley wood then

 

[bonsai]

prefer D'Oyly Carte personally

 

[bonsai]

almost got whipsawed yesterday so waiting for a different sort of signal today.

wont know what until it happens.

there is a bottom trend line from 4277
a/d is negative

 

[Hooya]

OK my question of the day is:- We agree that a mrket goes up because at that time the bulls are willing to buy at a higher price and the bears are nervous and want to sell at a higher price. With the cost of trading i.e a spread (albeit smaller for some than others) a trader at any price level will always have to pay a higher price to buy or sell at a lower price because they cant trade at market price (on the whole). Thus you could say that this will prevent a certain number of traders entering the market at anygiven price. There is an inbuilt system that makes only traders who are a certain % sure of thge direction willing to trade so to speak. So what whould happen if there were not costs of trading....would there be huge volatility because of everyone is free to enter and exit at no cost or would it actually cause the market moves to be slower because there would be trade at every given priceand thus a bull/bear battle would exist at every price.. But I guess we could assume voulme would be as high as it could get with no spread.


A bit of a messy question but Im sure you catch my drift.


Hit my target...

 

[bonsai]

Have a look at Market Profile.
I think you should start from the assumption that the big boys
have the spread under control.

Personally, as a smaller trader, I would still be waiting for a signal.
I have 0% certainty about where its going next.

That's the fun of it. It's a mystery trip everyday.

 

[Hooya]

Im sure most would wait for a signal ( i hope) but surely the spread keeps out a % of traders at any given market price. Alsdo, Im sure with no cost to entry or exit it becomes a different pyschological game althogether. BUt if they have it under control then I guess not alot would change

 

[bonsai]

well from where I sit, I think the spread is a total red herring.
Its important perhaps for scalpers but otherwise I think there
is a lot of whingeing from people (who are probably not making any money)

If you make a 50 pt profit and you give the waiter a 5pt tip, what's the problem !
A lot of restaurants charge more than 10% for 'Service'.

 

[mully]

Spread costs just facilitate different types of traders. Scalpers thrive on no "costs", position traders will view the cost of the spread in a different light. Reducing the spread would just produce more daytraders/scalpers. Horses for courses. This diversity of traders gives market their liquidity.

 

[Hooya]

agreed

 

[Hooya]

but a good exmple now...I wonder how may people would go long now if the were offerd 73 rather than the cmc quote of 73-76..

its a psygological thing

 

[bonsai]

don't you mean 74.5 ?

 

[Hooya]

well it was 73. something but yes

 

[mully]

Well once again the US market showed its nervousness about overcoming resistance. Until that is sorted out (possibly non-farm payroll numbers on Friday?) I cannot get too excited about FTSE100 having any conviction as to which way to go. Inclined to remain big picture positive because of both higher highs and higher lows characteristics of Global March 2003 bull run.

So still playing around with smaller position sizes until situation clarified

 

[mully]

Here is the FTSE World Index to illustrate higher highs/lows still intact