Are all trading investments done against one another?

[sopodo]

Hey Guys,

I have been learning for many months all about trading the emini s&p 500 but now have started to also look at other investment vehicles. Such as big stocks and penny stocks, vanilla options, exotic options like binary and barrier options. Now I have been doing some reading on Bonds.

I would like to know is there any type of trading where you don't trade with one another, rather you actually trade against the issuer of the investment product like with the banks or corporations who are issuing them?

Is there anything like this or similar available?

Any help much appreciated

Many thanks in advance

 

[meanreversion]

That doesn't make sense. What do you mean by "trade with one another"?

 

[sopodo]

That doesn't make sense. What do you mean by "trade with one another"?

Many thanks for your reply

What I mean is. Let's look at the emini s&p 500. When you say, place a limit order to buy a contract you then have to wait to get filled...but on the other side (sell side) you have to wait for someone that is going to sell to you and vice versa. Now I was thinking if there are any other trading investments where you don't trade like this or you do but not against the public like in the above example. But only directly with corporations or banks, hedge funds etc etc

Is this possible?

 

[Shanghai]

Many thanks for your reply

What I mean is. Let's look at the emini s&p 500. When you say, place a limit order to buy a contract you then have to wait to get filled...but on the other side (sell side) you have to wait for someone that is going to sell to you and vice versa. Now I was thinking if there are any other trading investments where you don't trade like this or you do but not against the public like in the above example. But only directly with corporations or banks, hedge funds etc etc

Is this possible?

Trading involves by definition a market. You take one side and someone else or an organisation takes the other side. Personally I would prefer a market that contains more private traders rather than less as they generally represent the less informed money whereas the institutions may be regarded as the "smarter" money. In terms of being filled with your orders this will be no problem if you chose an instrument with high enough liquidity.

 

[sopodo]

Trading involves by definition a market. You take one side and someone else or an organisation takes the other side. Personally I would prefer a market that contains more private traders rather than less as they generally represent the less informed money whereas the institutions may be regarded as the "smarter" money. In terms of being filled with your orders this will be no problem if you chose an instrument with high enough liquidity.

I know there's got to be a market for trading, I should of said is there any investment product out there that allows you to trade only with the institutional traders and not with retail investors. So you buy from say a bank, they sell to you and then some they or another bank buys from you in the future when you want to sell again?

 

[meanreversion]

Sorry, but why do you care who you trade with? I really don't follow what you're asking.

 

[MrGecko]

Well, I guess the primary market is something similar to what you are after. Maybe unit trusts, where you are trading against the box manager?

Bad idea IMO.

 

[sopodo]

Sorry, but why do you care who you trade with? I really don't follow what you're asking.

well your going to think this is nuts, but I always tried to stay in focus and not let this worry me, but now it's getting me all emotional in my trading. The problem is with the emini s&p 500 and many other markets you got the retail investors and the institutional investors and I what I am getting at is...when someone sells to me. Firstly there most probably another retail investor like myself and there either getting out at a reduced profit, or at a loss or at scratch. This kind of makes me all annoyed, that my wins may be from someones losses and vice versa.

 

[meanreversion]

I don't wish to be rude, but you need your head examined.

Who you trade with is irrelevant, and if it bothers you in any way then you probably shouldn't be trading.

Furthermore, if you worry about the other guy's P/L then you might be better off undertaking charitable works outside of the sphere of financial markets.

 

[SanMiguel]

well your going to think this is nuts, but I always tried to stay in focus and not let this worry me, but now it's getting me all emotional in my trading. The problem is with the emini s&p 500 and many other markets you got the retail investors and the institutional investors and I what I am getting at is...when someone sells to me. Firstly there most probably another retail investor like myself and there either getting out at a reduced profit, or at a loss or at scratch. This kind of makes me all annoyed, that my wins may be from someones losses and vice versa.

most probably you are trading with a market maker passing the trade onto you - the bulk of the volume in the market is not retail.

When you buy from a shop you are trading with the shop - they take their money off you as well but it is a trade - look up the word in the dictionary. When you buy a stock or currency, people will be selling to you for many reasons -some to close a loss, some who were in profit and are happy, some companies hedging their business, etc. etc.

 

[scose-no-doubt]

Probably depends what you're trading. I doubt there's huge retail interest in Latvian CDS whereas if you're trading the e-mini S&P...

Why does it matter anyway? You're either make profit or you dont. The other participants could be in the market for any number of reasons. Look at the flash crash report from last week for example... 75k contracts @ any price for a f**king hedge :S

 

[valutist808]

hi soporo

in order to trade directly with institutionals i belive that the first criteria is to be an institutional entity... you can look at warrants market or certificate index products issued by banks for their big clients/investors which wants an exposure on some emerging countries but tehy don't want to open an account with a broker in that country and also the bank offer such exposure at significative lower commissions

or look at forward market here is one to one trade and your counterparty can be an institutional and you can negociate the terms of the deals ...

however it is important this aspect at big traded volumes .. i belive

 

[Hilarymannah]

If you're worried about events/situations you have no control over, then this business is definately "NOT" suited for you (as meany has stated),.....; )

Trading the markets is zero sum, not win/win,...go figure !!

Disclaimer: I'm not in the habit of stating the obvious

 

[sopodo]

When I started out I didn't really have any problems with this. I think I started to mentally focusing on this too much and became silly about it as I have been starting to want to move from simulation to real money trading. I know I shouldn't let these things worry me. But I keep thinking of how in a casino at least you see who your taking losses from. Like for instance on the roulette table, a portion of people placing bets a long side me may lose and that money goes to the croupier while I perhaps win and it's basically their losses go back to the bank and then the croupier hands me my winnings. But at least you see who your playing against. In trading, you don't see that person.

Of course trading is not like betting in a casino. The odds are losing are not stacked up as high as in the casino. But I am sometimes silly and think that some of these people who sell to get out at a complete loss or a reduced loss are really unfortunate while I take the profit. For all I could know that trader that just sold to me and got me a fill could of been on his last dime and now I have taken profit and he's probably bankrupt or on the other hand it was a small lost to him as he's pretty well off still. It's just we are all sitting here behind computers placing transactions and don't see each other, don't notice what kind of people we are up against, we don't know there personalities. But in the casino we know exactly the kind of person they are. In a casino you can tell from the way they carry themselves, dress, what kind of watch they have, what sort of facial reaction they portray when they lose a bet to know whether they got money or are poor and that can mean taking consistent wins in a casino all the more less emotional for you as in you think to yourself ah there not like there poor and I won the bet so, so what then. But you know none of that in trading the stock market so emotions run wild. Anyone of you ever feel this?

So this is why ask, is there not another kind of investment vehicle or product I can trade which allows me to at least play against the big boys always like perhaps trading bonds or something similar. I wouldn't mind taking my profit out of losses from institutional traders as they got deep pockets and it's not like they care about losing a small loss here and there which is the small profit I am looking to make per trade.

I know still in the end of day this is a silly idea and I will just have to forgot about these ideas and trade the markets for real like I have been practicing in a simulator.

But still I would like to hear your opinions

Many thanks in advance

 

[SanMiguel]

When I started out I didn't really have any problems with this. I think I started to mentally focusing on this too much and became silly about it as I have been starting to want to move from simulation to real money trading. I know I shouldn't let these things worry me. But I keep thinking of how in a casino at least you see who your taking losses from. Like for instance on the roulette table, a portion of people placing bets a long side me may lose and that money goes to the croupier while I perhaps win and it's basically their losses go back to the bank and then the croupier hands me my winnings. But at least you see who your playing against. In trading, you don't see that person.

Of course trading is not like betting in a casino. The odds are losing are not stacked up as high as in the casino. But I am sometimes silly and think that some of these people who sell to get out at a complete loss or a reduced loss are really unfortunate while I take the profit. For all I could know that trader that just sold to me and got me a fill could of been on his last dime and now I have taken profit and he's probably bankrupt or on the other hand it was a small lost to him as he's pretty well off still. It's just we are all sitting here behind computers placing transactions and don't see each other, don't notice what kind of people we are up against, we don't know there personalities. But in the casino we know exactly the kind of person they are. In a casino you can tell from the way they carry themselves, dress, what kind of watch they have, what sort of facial reaction they portray when they lose a bet to know whether they got money or are poor and that can mean taking consistent wins in a casino all the more less emotional for you as in you think to yourself ah there not like there poor and I won the bet so, so what then. But you know none of that in trading the stock market so emotions run wild. Anyone of you ever feel this?

So this is why ask, is there not another kind of investment vehicle or product I can trade which allows me to at least play against the big boys always like perhaps trading bonds or something similar. I wouldn't mind taking my profit out of losses from institutional traders as they got deep pockets and it's not like they care about losing a small loss here and there which is the small profit I am looking to make per trade.

I know still in the end of day this is a silly idea and I will just have to forgot about these ideas and trade the markets for real like I have been practicing in a simulator.

But still I would like to hear your opinions

Many thanks in advance

When you sell a house or car to someone, what do you think? Do you worry that you sold and a month later the market moves down 30%?

If you want to buy and have the money go directly to the company then you need to get in at the IPO or initial bond offering but when you sell for your imagined profit, who will you be selling to? So you are okay with taking money from companies but not from people? Think about that - it is no different.

 

[meanreversion]

Hmmm, you really are insane. Please abandon thoughts of trading as your head is in completely the wrong place.

 

[sopodo]

Hmmm, you really are insane. Please abandon thoughts of trading as your head is in completely the wrong place.

why am I insane for just stating how I feel? That's an offensive thing to say.

Look at it from this way

I don't consider my self to be arrogant and I don't think what I am going to mention in the next paragraph is arrogant either:

I have worked in a number of different areas during my life, I am a bit of an entrepreneur in the making. Still in the small time. I got a lot to learn. But I am very capable. I feel that I am very fortunate with the abilities that I have. But tend to change my mind a lot and have a hard time to sticking to things. I found trading is something I am good at and want to pursue as a long full time career. But I am also good at many other types of businesses. People call me an Ideas Man. I come up with so many ideas all the time as I am very creative. I then brainstorm these ideas to see how I could go about and turn them into successful businesses. Many people who get into trading, get into it for many types of reasons. Some are desperate and just want to make money really quick and then tend to fail in their first week. Others put in the time needed to really learn the market. I have always been patient when it comes to creating any sort of business. But you know what, I got tired of all the waiting and small profit making from my businesses. Which got me into just wanting to rush into trading to make quick profits. But then as I learned bit by bit I found I had tons of reading to do and practice in the simulators which is why I have not yet decided to go towards real money trading. But here's the thing, these 2 types of people I mentioned that get into trading for those purposes I mentioned above. There are a portion of these types of people in the world who think trading for them is the only thing there good at and they spend there whole life at it and still don't make massive profits. But some do. I have always thought if you want to be a multimillionaire trader you will only get that if you worked for many years in an investment bank, hedge fund or trading house. And even then not all of traders become hot shots either. Where I am going with this, is that most of these people that trade are not blessed with the abilities to come up with many different types of ideas to make money in the world. They don't know the ins and outs and special methods to obtain financial wealth. I have acquired these skills in my years but have unfortunately still not been able to put them to great use to make any substantial money. I am still on that learning curve. With my other businesses that I have started I am on what I call a waiting game, patiently waiting for things to come together. And while I wait I wanted to get in and learn the stock market. But tell me, even if I can get around these issues that I present in this thread should I still be working towards trading the stock market or rather continue with my other business ideas?

I always thought when I make it I would never touch the stock market as I have always viewed it as a big gamble like betting in a casino except the odds are not as much against you, as the stock market is like a controlled bet where you make decisions based on market movement, analysis, news, and you can choose to get in and out whereas a casino offers you only a forced bet in most of the cases which is similar to exotic options such as binary or barrier options.

 

[barjon]

sopdo

easy - just confine yourself to spreadbetting or SB/brokers version of CFDs. The prices they offer are derivatives and you are trading directly with those companies/brokers with no fear of sending any poor soul to the poorhouse.

jon

 

[meanreversion]

Ok, apologies I didn't mean to offend. If you are forever concerned about the other guy's P/L, you would never buy or sell anything, never mind trade. As someone said earlier, what if you sell your house and the market then collapses, do you go and give the money back?

Maybe it's just the way you've explained yourself but I really don't understand your point of view. Trading is a capitalist venture and what happens to the other person is of no concern to you.

Or think about it this way - do you think that anyone else trading with YOU gives a micro-second of thought as to your financial well-being? No is the answer.

 

[sopodo]

sopdo

easy - just confine yourself to spreadbetting or SB/brokers version of CFDs. The prices they offer are derivatives and you are trading directly with those companies/brokers with no fear of sending any poor soul to the poorhouse.

jon

That's my other problem, even though I talk of casinos I don't like them and spread betting, CFD's and exotic options such as binary and barrier options isn't much different to gambling and I wouldn't touch them. I would rather trade the real markets if I can at least take wins from the losses of wealthy pockets such as institutional traders.