|
PureBytes Links
Trading Reference Links
|
Folks on the list:
I have no bones to pick with vendors or electronic trading fans or pit traders
or brokers. If you've read the lists lately, you know I feel the pit traders and
pit brokers at the exchanges have led the parade for the move to fully
implemented electronic trading. I'll be sad when the open outcry stops, but I'll
be a happier trader.
HOWEVER...For any broker to tell this list or any other list that on a
consistent basis, you can or will get better fills, faster fills, better
service, faster service is just plain hype. At the moment, electronic trading is
a good venue for traders that have a smaller account and cannot find a full
service broker that allows them pit access. By pit access, I mean that when *I*
trade the S&Ps, I dial using my speed dialer. A floor clerk AT THE S&P PIT picks
up the phone and answers quoting the current bid and ask of the front month S&P
contract before even saying hello. I say, 'Hi, it's Tim...buy XX Sep S&Ps
market,' and they flash that order into the pit, all the while quoting me the
current prices, then tell me my fill. I am answered and filled in less time than
it takes for an electronic order to hit the electronic pad in the pit and get
picked up. And this talk of 'better fills' on the electronic services...sorry,
it just isn't so. If you are getting poor service from your broker, change
brokers. Don't just listen to some guy with a vested interest tell you that all
your problems will be answered if you just switch to his new doodad.
And if the market is less orderly, you can bet my fill will be faster and the
service better.
As I said, the day for electronic trading in all the pits is near. But until
it's implemented, please don't make these wild claims about electronic trading.
It doesn't help the electronic trading cause, because people try it and find the
unrealistic claims are just that: Unrealistic. Saying that you will get better
fills and better service using electronic services on the Merc and CBOT right
now is like saying you'll get better fills and service using the Mid-Am currency
contracts instead of the IMM full currency contracts.
And similarly, you WILL be paying the extra brokerage if you trade the E-minis,
although apparently some brokers will lower their 'low' commisions if you switch
over to trade electronically with them. But what rates are they charging? Again,
I have no complaints with any brokers--many of my friends are brokers. But when
someone claims they will only charge you half the brokerage fees to trade
E*minis through them, you had better check their rates relative to other brokers
offering accounts of your size similar service. Remember!! It costs a broker the
same per contract to clear one E*mini as it does to clear one S&P contract. So
their costs are literally five times higher for clearing five E-minis versus
clearing one S&P.
Last, the E-minis are the tale and the S&Ps are the dog. Currently, you can't
get out of your E*mini electronically on a stop. Nor can you enter or exit 'at
the market.' When you visit the S&P pits, you can see the thirty or so people
that huddle around the E-mini quote stations and arbitrage the orders that are
sent to those machines from the brokers off of the exchange floor. Those locals
are not going to take the orders off of those machines and fill them UNLESS they
are able to make money. That's why they call it arbitrage.
Tim Morge
IdontgetNo@xxxxxxx wrote:
>
> Subject: Re: Trade mini instead if regular S&P
> Date: Mon, 15 Jun 1998 08:46:55 EDT
> From: IdontgetNo@xxxxxxx
> To: mstoller@xxxxxxxxxxxxx
>
> Well I don't know which company your with or from what angle your coming from
> but the mini's can never compare to the pit trading. Many times the mini will
> print a new low but the big ones never will. Speed? I can place an order for
> my clients faster than any computer terminal can. Oh and yes I get my fills
> right away. Maybe that's a specialty that I have obtained after being in this
> business for 15 years but you must be doing something right if your around
> this long.
>
> Morris
|