Trading spread on indices. How much?

Naz

Experienced member
1,391 24
The DIA tracks the $INDU so its virtually the same chart.
 

Attachments

  • dia7.gif
    dia7.gif
    8.9 KB · Views: 503

cloudbase

Junior member
22 0
Naz.

Using the Diamonds to trade the Dow is not something i had considered.
Can it only be traded through US direct access brokers and what
is the cost if you don't mind me asking.

thanks Steve
 

Naz

Experienced member
1,391 24
Cloudbase,

The cost is based on whatever your brokers fee structure is and the amount of shares traded.It may vary from $1-$15.

Its a tracking stock with lots of liquidity and be traded from any broker that offers it.

All Nasdaq level 2 direct access traders just enter the code DIA on their screen and there it is.I run the Dow 30 chart in the background and if i see any entry i just type in the code and hit the ask.The fill is instant always.The liquidity is so good that its just a dream to manage your position.If i was a DOW trader its how i would trade the stock because of the money you save as against using a sb company.Its yet another edge a level 2 trader has.


Naz
 
Last edited:

oatman

Senior member
2,879 22
Naz, what exactly is DIA. I just got it up on IB, but don't know what I'm looking at :cheesy:
 

Naz

Experienced member
1,391 24
Oatman,

The DIA is the DOW tracking stock.Whatever the DOW is doing the DIA will almost mirror it.If you see a move on the DOW just get in on the DIA and it will move the same way.Its one of the fastest ways to trade the DOW without any shenanigans that you get from the sb companies.
 

balusa

Junior member
23 0
Naz, I know about ETFs, but i am more interested in trading cash indices and not something that replicates them (DIA,SPY etc). Therefore I am looking for the companies that provide that kind of services. I have already found one (see my posts above). Can you recommend any other ones?
 

Bigbusiness

Experienced member
1,408 23
I don't think you can trade a cash index. CFD's and spreadbets seem to follow the futures. There are index trackers but I think they are more of a longer term option.
 

stevet

Established member
917 5
balusa

you can probably find a company somwhere that will trade anything -but anyone that lets you trade the cash index for real is either gonna take you to the cleaners on costs - or someone is going to take that company to hedge hell and blow them out - either way you will lose out

trading is hard enough - stick with real companies and real trading opportunities - whilst the dia and spy are only low leverage futures contracts - learn to trade them or the futures - no point trying to trade the cash unless you are an arber
 

stevet

Established member
917 5
there are people who would offer the cash index for real - but i am sure they will get stung real bad doing that or just cream off so much money to cover themselves that you woudl not want to trade with them

but if someone dives in - let us know how you get on
 

balusa

Junior member
23 0
Correct me if I am wrong...Perhaps, I do not understand something...But what is wrong with trading in cash indices? You are telling me that a cash index follows the futures, but how that can be? I thought that Dow and S&P did not follow anything and that they float on their own...Can anyone please explain? And also, why people who offer such kind of trading will necessarily take me to the cleaners? The issue is rather sensitive for me, because I have been studying index behaviour for quite a while, which is why I want to trade in cash indices, not ETFs
 

stevet

Established member
917 5
balusa

sometimes cash follows futures - sometimes futures follow cash - etfs will follow a liquid futures contract - the dow is gonna be a bit different due to illiquidiyy in the contract that will produce aberations

a cash index is not a tradeable contract - its a value arrived at by a calculaton based on the stocks that make up that index -to repilicate it - the liquidity of all the underlying stocks would haev to be such that you could at the same intstant - buy them all - in exactly the same ratio

you can set up easier systems do this by using a fewer number of stocks which in general would represent the index - but all sorts of other issues come in

hence etfs and futures appeared - but by logic these will either follow or lead the cash as sentiment of investors change

the fact you chose to look at cash indicies may in part give an indication of your knowledge of trading - and since knowledge is acquired over time - this maybe a time to step back and ask yourself why you feel as a learner that just because you chose to study cash indicies - why do you feel that that was the right thing to do?

in trading - try to see what the professionals are doing - and then choose the optons open to you - thats how you make money
 
Last edited:

zow

Active member
136 0
balusa said:
...But what is wrong with trading in cash indices? You are telling me that a cash index follows the futures, but how that can be? I thought that Dow and S&P did not follow anything and that they float on their own.........I have been studying index behaviour for quite a while.....


Balusa

You really need to start from square one with the REAL practical trading world in mind...... not as some academic theoretical exercise.

Try 'First steps' pages on this site....
 
 
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock