|
PureBytes Links
Trading Reference Links
|
I think some clarification about stock future is
needed.
Stock future is very common in asia and europe for
more than a few years.
it is designed as a derivative for hedging (like
the index future we have here). of course people
can use them for speculation (like what we do
with index future here) but the primary use is not
that and the speculation portion should be only
a small % of the traded volume.
New tightened rules will be introduced when people
open future accounts trading such derivatives so
only a small portion of the net asset of the account
holders is used for such speculation.
The problem is - who is going to enforce such rules :)
>From what I see in Asia, only a few widely held stocks
will have their future counterpart take off in
trading volume ... all the rest will die due to
ill liquidity. And interestingly, a lot of people
relate anything that is directly stocks related as
safer vehicle than those stuff related to "index" :)
-Lawrence
--- Gary Fritz <fritz@xxxxxxxx> wrote:
> > That's right....I want to control $60k of
> Microsoft for a measley
> > $6k tie-up. Effectively: A $1 move = 17% return on
> margin
> >
> > Anyone else ?
>
> Sure, lots of people -- back in 1929, when that was
> the kind of
> leverage you could use for regular stock purchases.
> And that kind of
> leverage had a lot to do with the unusual weather
> (it's raining
> traders) they had in New York that year...
>
=====
Lawrence Chan http://www.tickquest.com
Innovative Analytical Software for Trading Professionals
|