Outside of stocks, what are the other instruments traders trade ? I am talking of retail traders. I have been working on stocks for the past year and feel I need to look outside stocks to experiment with my system. More importantly, I need to gather data for those instruments and it would help to know to know those that are good candidates. Thanks a lot. I heard ES and TS, so far..
Ok. Thanks. ES is definitely on my list. Right now, I am just collecting daily data for those (rather building a list of all securities that I may look into 6 months from now). I found myself lacking of historical stock data and is hurting my backtest right now. So don't want to end up in a situation later.
Hi All,
First post here, re a futures question about the spread/commissions.
I live in Australia, the value of our index here is $25 per point. So when i open a futures position i pay the spread (1 Tick = $25), do i also pay commission, as per the Interactive Brokers website? See attached picture. So the opening of a position would cost me $30 in total???
Also, what are the implications of holding futures positions overnight, say up to a week at a time?
Appreciate any feedback
Thanks heaps
First post here, re a futures question about the spread/commissions.
I live in Australia, the value of our index here is $25 per point. So when i open a futures position i pay the spread (1 Tick = $25), do i also pay commission, as per the Interactive Brokers website? See attached picture. So the opening of a position would cost me $30 in total???
Also, what are the implications of holding futures positions overnight, say up to a week at a time?
Appreciate any feedback
Thanks heaps
Attachments
rathcoole_exile
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i think you'll find that $5 is per side per contract, so you'll also have to factor it in as a cost when you later sell your contract(s) too
Thanks rathcoole, so if i were to increase my position sizing, eg, say trading 5 contracts, i would still only pay $25 for the spread (if 1 tick), not the spread x $25 = 125? and whatever the commission may be at that level.
Any comment re holding futures overnight? No financing costs, interest fees etc?
thanks heaps mate.
rathcoole_exile
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no mate, you'd have to cover the spread 5 times, plus 5 buy-side comms plus 5 sell-side comms
i mean, you don't actually pay the spread, you just have to factor the spread in to your calculations for profit
eg if Bid is 1143 and Ask is 1145, you pay 1145 when you Buy a contract,
and can immediately Sell it for 1143,
so you can see that you have to wait for the Bid/Ask to move to at least 1145/1147 before you can even sell at BreakEven
And then you factor in the commission costs, which would be $10 round-trip,
you would need Bid/Ask to rise to, say, 1145.5/1147.5 to cover at B/E and cover dealing costs.
So you need the market to move 2.5 points before you start to make a profit, and some scalpers aim for 3 points or less !!
Getting it wrong is even worse.
Back to original example, you Buy at 1145
price immediately drops 2 points so Spread is 1141/1143
your Stop Loss is hit at 1141
so a 2 point drop costs you 4 points + commissions
(note, this is for illustration only, the Spread on the S&P futures isn't usually this harsh)
i mean, you don't actually pay the spread, you just have to factor the spread in to your calculations for profit
eg if Bid is 1143 and Ask is 1145, you pay 1145 when you Buy a contract,
and can immediately Sell it for 1143,
so you can see that you have to wait for the Bid/Ask to move to at least 1145/1147 before you can even sell at BreakEven
And then you factor in the commission costs, which would be $10 round-trip,
you would need Bid/Ask to rise to, say, 1145.5/1147.5 to cover at B/E and cover dealing costs.
So you need the market to move 2.5 points before you start to make a profit, and some scalpers aim for 3 points or less !!
Getting it wrong is even worse.
Back to original example, you Buy at 1145
price immediately drops 2 points so Spread is 1141/1143
your Stop Loss is hit at 1141
so a 2 point drop costs you 4 points + commissions
(note, this is for illustration only, the Spread on the S&P futures isn't usually this harsh)
JeffreyLin
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Hi Skris, I'm in the U.S. so things may be slightly different, but I use Interactive Brokers (IB) exclusively for executing my trades. It looks like if each tick is $25, if you buy a 5 lot, each tick move in the index is 5 x $25 = $125. So if the index goes up 1 tick, you make $125, and if it goes down 1 tick u lose $125. But as was commented below, you have to pay the ask price. If you really want in at a level, depending on the speed of the market, you may want to just buy "at the market" which would fill your order at the ask price. However, in a slower market or you have your levels defined, you can put in a limit order at that price and wait to be filled. So when the price moves through your level thats when you'd get filled. However, this also has the possibility of not getting completely filled or just partially filled on the trade, because you have to "Wait in line" behind others who have also put in an order to buy at that price.
As for holding overnight, the main concern traders have with futures is usually the margin requirements. There is lower margin requirements needed for day trading than if you hold something overnight. So some traders may sell it right before the futures close, then buy it back (hopefully at the same price) overnight when the futures open again. But that's only a concern if you're really pushing your margin limits...which means you're probably trading quite big for your account size.
