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<<If you were long and your stop got hit, it would have turned into a
market
order to sell. Since there would have been no buyers on the way down,
you
would have been filled at the bottom around 1330 for a $7500 loss per
contract.
<<It looks like a good example of where the only protection would have
been a
standing put option.
Comments?>>
Bob:
Yes, stops would have helped. The move started at 947 edt and hit the
low at 949. The emini had 420 ticks on the way down from 135350 to
132925. I was able to get out at 1347 even by phoning the order in, but
would have been out at 1352-3 with a stop. The reason for the post,
however, is the quandry we face re FSB (frequent stop busting) in the ES
versus a UFO (unexpected fundamental occurance) as well as a FTG
(frequent techincal glitch) occuring simultaneously. What is the
liklihood of both a UFO and a FTG occuring at the same time, which was
what happened? (Unless the sudden increase in volume is what crashed
the CUBS system). What is the liklihood of FSB? In my experience the
liklihood of FSB is almost weekly, whereas the liklihood of a UFO and
FTG is very unlikely. However, when the latter occurs, it can be
deadly. At any rate, the liquidity of the ES toys was plenty to allow
an exit near a previously placed stop.
Don
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