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Discussions regarding service would be a bit more informative if the approximate
rate and type of service (full, discount, electronic only) is indicated. My
broker will accept stop, limit, and market orders on the EMini if I use the full
service desk at $43 r/t but won't accept them on the discount desk I use at $20
r/t. They also advertise a $15 rate for the EMini but it's introductory only,
then goes to standard rate of $25. This is not to say that full service isn't
worth the money for those who getting the hang of futures trading or requiring
special services or assistance. I strongly suspect that the large brokers are
milking the spread between the EMini and S&P and could easily lower their
commissions. Personally, I am of the opinion that one will get the best price
and execution where there is the greatest liquidity and today that's in the full
S&P. That doesn't mean that traders, particularly small traders, won't get hosed
on price or service.
Earl
-----Original Message-----
From: Richard Davidson <RichDavidson@xxxxxxx>
To: Timothy Morge <tmorge@xxxxxxxxxxxxxxx>; Manning Stoller
<mstoller@xxxxxxxxxxxxx>
Cc: IdontgetNo@xxxxxxx <IdontgetNo@xxxxxxx>; Omega-list@xxxxxxxxxx
<Omega-list@xxxxxxxxxx>
Date: Monday, June 15, 1998 9:25 AM
Subject: Re: Fwd: Trade mini instead if regular S&P
>My broker accepts STOP,LIMIT and MARKET orders on the E mini.
>
>Rich Davidson
>
>----------
>> From: Timothy Morge <tmorge@xxxxxxxxxxxxxxx>
>> To: Manning Stoller <mstoller@xxxxxxxxxxxxx>
>> Cc: IdontgetNo@xxxxxxx; Omega-list@xxxxxxxxxx
>> Subject: Re: Fwd: Trade mini instead if regular S&P
>> Date: Monday, June 15, 1998 10:39 AM
>>
>> Manning:
>>
>> Again, I am not implying you have a hidden agenda or that you aren't a
>good
>> broker. And I even agree that there are people that might benefit from
>using the
>> E*minis versus the full S&P contract. But I thought the hype about
>electronic
>> trading had far surpassed the truth and some facts needed to be stated.
>These
>> facts need to be taken into consideration before someone decides the
>E*mini is
>> better or worse for them to trade. The most important fact facing an
>E*mini
>> trader is that you cannot use STOPS! And 'at the market' execution cannot
>be
>> untilized. I understand that changes in the orders allowed by the
>exchange may
>> bring these order types to the E*mini markets. But until they are
>available to
>> E*mini traders, trading E*minis when you have access to a good broker
>that has
>> floor access makes no sense.
>>
>> And until full electronic trading is implemented, E*mini traders need to
>realize
>> that they are at the mercy of the locals that 'arb' their orders from the
>> electronic trading consoles to the pits. In other words, until *all* of
>us trade
>> during the day using the same electronic system, those that choose to
>trade
>> electronically will be at a disadvantage. E*minis trade at the mercy of
>the full
>> contract S&P...their price action follows, not leads.
>>
>> So if I trade a two lot in the normal S&Ps, and my broker charges me $18
>a round
>> turn, it would normally cost me fives time that, or $180 a round turn to
>trade
>> 10 E*minis versus $36 a round turn to trade 2 S&Ps. And if I trade the 10
>> E*minis instead of trading the 2 S&Ps, I cannot use stop loss orders or
>'at the
>> market' orders trading electronically. This makes no sense. It costs me
>more, if
>> I have a good broker the fills will be worse for the E*minis, and I can't
>use
>> good money management or exit/entry techniques.
>>
>> I don't have an agenda. I just think people should think through some of
>the
>> things that are proposed and see the fault of the logic. E*minis are good
>NOW if
>> you have a very small account and you can't or don't want to trade a full
>S&P
>> contract. They will be better in the future for more of us.
>>
>> Tim Morge
>>
>> Manning Stoller wrote:
>> >
>> > Dear Tim,
>> >
>> > I do trade directly to the floor as you do but I was responding to the
>1 or 2 lot
>> > full size trader, not the size trader.
>> > I have a strong feeling that there are many smaller size traders on the
>list and was
>> > responding to them in my comments about the mini.
>> > I have no "angle" and no hidden agenda.
>> >
>> > Manning Stoller
>> >
>> > Timothy Morge wrote:
>> >
>> > > 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
>>
>
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