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Eric wrote:
>
> Tom,
>
> I understand your concern on the stops since I plan to trade mini's on
> Globex (terminal in my office, luckily), but the stop situation is the
> same as other Globex markets. They expect the broker who accepts a
> Globex stop order to act just like a broker on the floor who accepts a
> stop order. You pay attention to the market and when the price is hit
> then you go to the market. This seems reasonable to me. A floor broker
> accepts this "risk" and only gets paid about $1 a contract. I am sure
> you are getting paid more, so you could certainly keep an eye on it.
> People off the floor often think that stops are this automatic thing
> that just gets filled when the market trades there, but in reality,
> people have to pay attention. They have dozens of orders in their decks
> and they are able to keep track.
> As a broker on Globex, you replace the pit broker, so that puts the onus
> on you. When I traded APT on LIFFE, it worked the same way.
> I realize this is only 30 lots and under, but with the ability to see
> size at 10 price levels above or below a market, do you really want
> EVERYONE to know where your stops are??????
> You can place stops in the big SPOO pit also. I assume the mini is
> fungible with the big.
> My bigger concern is the .25 minimum tick size. With the extra costs
> there plus the extra commissions of trading the mini, I wonder if people
> are really going to trade it. If you are a 2 lot SPOO trader now, my
> understanding is with the new contracts, you have a choice of trading 4
> new big SPOO's in the pit or 20 mini's on Globex. What is the incentive
> to go to Globex???
>
> Eric Michaels
Eric,
I think there is a big difference from a floor broker watching for stops
and those off the floor like Mr. Alexander. Although undoubtledly he is
a good broker and could watch markets for his clients, he still is NOT
on the floor. That difference when it comes to stops can be a big
difference in fills.
:)
rick
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