Re: Fwd: Trade mini instead if regular S&P

["Earl Adamy" <eadamy@xxxxxxxxxx>]

It's the service end where things get tough to evaluate before opening an
account and settling in with treasuries to cover margin. In trading stocks for
many years, I found that higher commissions didn't necessarily correlate to
service. OOH, once satisfied with executions and service, I was never one to
jump elsewhere for a lower commission - there is a point at which commissions
cease to be a consideration in trading.

I'm paying $20 r/t on 1-2 contracts in the full S&P and currencies and use limit
and stop orders almost exclusively because I'm generally able to anticipate
where I want to enter/exit. Except for occasional market order, a direct line to
floor broker isn't going to add value to my trading. What I need is fast reports
when my orders are triggered and I'm not sure that changing brokers is going to
get reports out of the pit any faster?

Earl

-----Original Message-----
From: Timothy Morge <tmorge@xxxxxxxxxxxxxxx>
To: Earl Adamy <eadamy@xxxxxxxxxx>
Cc: Omega-list@xxxxxxxxxx <Omega-list@xxxxxxxxxx>
Date: Monday, June 15, 1998 2:29 PM
Subject: Re: Fwd: Trade mini instead if regular S&P


>Earl:
>
>I think you're on to the discussion people should be having here, and Manning
>might be a great person to step forward and speak about what his house
>offers--NOT as an advertisement, but as a good start towards understanding what
>a brokerage house does offer to typical 1 or 3 [max of 10 contracts] lot S&P
>traders down to singles in the E*minis.
>
>Some people have already emailed me asking for my broker's phone number but it
>really isn't fair to look at the service I get and the rates I pay--I've been
>trading institutional size at this brokerage firm for 18 years and the rate
just
>isn't fair to use for comparison. So maybe we can get some people to step
>forward and describe what their broker offers them, with rates and styles of
>execution...if people are worried about the advertising part, leave out names
>and just use descriptions?
>
>Just a thought.
>
>Tim morge
>
>Earl Adamy wrote:
>>
>> 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
>> >>
>> >