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The CBOE has said they will list single stock futures as a defensive measure.
But the more telling item is this. What is the single largest source of
volume of the NYSE? The answer: The CBOE. Wouldn't the CBOE like to move
some of that volume in house? The weekly statistics from the NYSE show about
25% of its volume comes from program trading. This is "trading" volume, not
"investing" volume.
Regards,
John J. Lothian
Disclosure: Futures trading involves financial risk, lots of it!
In a message dated 2/18/01 10:11:05 PM Central Standard Time,
prosys@xxxxxxxxxxxxxxxx writes:
<< Based on strong competition from the CBOE, stock futures in the US are
doomed unless:
1) they provide much more rapid trade execution than options
2) have more liquidity than options
3) provide AS MUCH or more LEVERAGE than options
4) have 23 hr per day trading coverage
No question, only the high volume stocks will be justified for this new
vehicle.
I believe they will have a good chance if ALL 4 items above are attained.
#1 should certainly be easy to attain via electronic trading interface, and
#2 is a matter of marketing and promotion;
#3 is very questionable if the FED is involved (kiss-of-death)
#4 easily done
So, again, #3 is the "key" to success. >>
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