|
PureBytes Links
Trading Reference Links
|
The larger problem was the failure of ARCA right before or during the Fed
report. It creates a high level of frustration to have stops and trades
pending and you don't realize that the ECN is down. I have had a lot of
trouble with ARCA but ISLD is often too illiquid to execute the trades.
Lawrence Price
Stefan Schulz wrote:
> Rare indeed - we just had one. The March Nasdaq moved a maximum of 131
> points between ticks (twice!) and a maximum of 262 points within 3
> ticks. Ditto other indices.
>
> Trailing stops are useless in such a fast market and volatility-based stops
> are thrown off course by this kind of move because it concentrates a lot of
> volatility in a very short time, continuing at the earlier level of
> volatility level after a few minutes.
>
> So, how does one deal with these events if caught in the wrong position
> ? Grit one's teeth and bear it, assuming that the Fed doesn't cut rates
> between FOMC meetings that often and therefore the expectancy of a loss is
> low enough ? Take a way-out-of-the-money option position ? Otherwise ?
>
> (While we're at it, does the hour before the Fed announcement look like
> someone leaked something ? ;-)
>
> Regards,
> Stefan Schulz
> Suaviter Limited
> prog1@suaviter.co.uk
|