searching for holy-grail.. is this theory true?

[rsh01]

if there is 50 on the offer & same on the offer of the price (tick/pip/whatever) above, & you pay market for 100, what happens to price? goes up cos of greater demand than supply?

that is supply & demand in operation. always the same, regardless the market. & there ensues a 25 page debate (though some of the posts were worth it).

the orig post was not about the macros of the paper vs physical futures markets.

 

[new_trader]

and I explained to you that is bo77ox as margin is not the limiting factor, margin is neither created or destroyed in the ZSG. the reason more contracts didnt trade on a given day is people didnt want to take the risk.

So lack of margin has never prevented me from opening another trade?

 

[cablemonster]

So lack of margin has never prevented me from opening another trade?

why the focus on you? we are talking about the market not you. you lose some margin, someone else gains it, total margin remains the same. margins are so low on futures anyways there is more than enough firepower to go around.

 

[new_trader]

why the focus on you? we are talking about the market not you. you lose some margin, someone else gains it, total margin remains the same. margins are so low on futures anyways there is more than enough firepower to go around.

Ah, so now you are saying a new participant must enter, right? And if no other participants want to take the risk? What now?

 

[cablemonster]

Ah, so now you are saying a new participant must enter, right? And if no other participants want to take the risk? What now?

wtf. If you lose enough margin to trade 1 contract then someone else gains that, allowing them to trade +1 contracts more than their previous max size. You are saying that the number of contracts available to trade is limited by margin, I am saying that is bo77ox it's limited because people dont want to take the risk and trade. If everyone traded their max clip size way more contract would be traded but people dont as they dont want the risk. The amount of contracts traded is clearly not limited by the margin anyways, if everybody traded twice as much there would be twice the number of contracts traded for the same margin. ho hum. it's so clearly a retarded idea.

 

[numbertea]

I still can't decide who are the buyers and who are the sellers. All I "know" is that if they want to trade, they are either on the book for a certain time frame or not, but if their trade is completed, they ARE part of the volume. Looking at each trade event can help one figure out the direction that price should take to satisfy the most trade placers immediate and near future. One can then look at the actual price movement and then decide the amount of resistance the market is giving to the movement of price in either direction. Surely bid and ask, being the only way to enter the market providing liquidity, will in the long run give the answer as to market sentiment compared to current price even if the price of cheese in Antartica reaches the same price as peas in Idaho?

Cheers

 

[new_trader]

wtf. If you lose enough margin to trade 1 contract then someone else gains that, allowing them to trade +1 contracts more than their previous max size. You are saying that the number of contracts available to trade is limited by margin, I am saying that is bo77ox it's limited because people dont want to take the risk and trade. If everyone traded their max clip size way more contract would be traded but people dont as they dont want the risk. The amount of contracts traded is clearly not limited by the margin anyways, if everybody traded twice as much there would be twice the number of contracts traded for the same margin. ho hum. it's so clearly a retarded idea.

I think you are deliberately dismissing what I am saying because you refuse to even acknowledge what I am saying. The idea that infinite contracts can be written is purely and simply a theoretical concept. Traders who are trapped in a position and cannot open new positions due to lack of margin is basically supply/demand that is no longer available. No new contracts will be made unless new participants can be induced to enter, the trader who has gained the margin cannot utilise it without any new participants entering the market. I asked you a simple question, if no new participants want to take the risk, what happens?

 

[Liquid validity]

The idea that infinite contracts can be written is purely and simply a theoretical concept. Traders who are trapped in a position and cannot open new positions due to lack of margin is basically supply/demand that is no longer available. No new contracts will be made unless new participants can be induced to enter, the trader who has gained the margin cannot utilise it without any new participants entering the market. I asked you a simple question, if no new participants want to take the risk, what happens?

Market makers for one.
They no longer exist just to provide a market.
That legislation was stripped some time ago.
They are now permitted to trade any way they see fit,
as well as making a market.
They just churn, it works for them as they obviously earn the spread,
instead of paying it.

The liquidity they provide will be consumed by HFT's doing the same thing.
MM's will also consume HFT liquidity.
In fact MM's are HFT, they just don't exist solely for trade profit.

 

[cablemonster]

I think you are deliberately dismissing what I am saying because you refuse to even acknowledge what I am saying. The idea that infinite contracts can be written is purely and simply a theoretical concept. Traders who are trapped in a position and cannot open new positions due to lack of margin is basically supply/demand that is no longer available. No new contracts will be made unless new participants can be induced to enter, the trader who has gained the margin cannot utilise it without any new participants entering the market. I asked you a simple question, if no new participants want to take the risk, what happens?

you are talking bo77ox again. traders who are trapped in a position are precisely people who have to add supply or demand in the near future, if they are underwater and are going to puke anytime soon bringing supply and demand to the market. What is this bunk about new traders having to enter, there are a plethora of participants some will be opening positions, some closing, the idea that someone new has to come in for a trade to happen is pure bunk.

I didnt answer your questions because it is so clearly toot. What happens if no knew participants want to take the risk then the market will play out with people playing their hand.

 

[new_trader]

you are talking bo77ox again. traders who are trapped in a position are precisely people who have to add supply or demand in the near future, if they are underwater and are going to puke anytime soon bringing supply and demand to the market. What is this bunk about new traders having to enter, there are a plethora of participants some will be opening positions, some closing, the idea that someone new has to come in for a trade to happen is pure bunk.

I didnt answer your questions because it is so clearly toot. What happens if no knew participants want to take the risk then the market will play out with people playing their hand.

What is this crap, this is pure bollox again. Traders who have to enter have to exit, meaning new supply will equal demand. Then there are traders who will puke their nukes and this will cause demand to revolve, some positions will open, others will close, some will move in, some will move out...all of it is infinite you see. It is clearly retarded to think buyers will be sellers when margin is neither created or destroyed in the ZSG. It's all consumption and prevention and revulsion and deception. That's it.

 

[numbertea]

Liquidity in futures markets is infinite as long as you accept the current bid and ask. Unless you are the last person connected to the network when the world ends. Sorry about that.

Cheers

 

[Shakone]

Liquidity in futures markets is infinite as long as you accept the current bid and ask. Unless you are the last person connected to the network when the world ends. Sorry about that.

Cheers

Eh? Now you're opening up a new can of worms.

 

[cablemonster]

What is this crap, this is pure bollox again. Traders who have to enter have to exit, meaning new supply will equal demand. Then there are traders who will puke their nukes and this will cause demand to revolve, some positions will open, others will close, some will move in, some will move out...all of it is infinite you see. It is clearly retarded to think buyers will be sellers when margin is neither created or destroyed in the ZSG. It's all consumption and prevention and revulsion and deception. That's it.

I guess you are finished now given you have stopped arguing your BS margin nonsense. just clicked on your journal, struck a chord. Here write this number down 01777 248321, step away from the machine and book yourself in.

 

[cablemonster]

Liquidity in futures markets is infinite as long as you accept the current bid and ask. Unless you are the last person connected to the network when the world ends. Sorry about that.

Cheers

no mate liquidity is not infinite, if it were infinite the market would not move. ask Toast about price movement 101

 

[numbertea]

You must include this phrase, "As long as you accept the current bid and ask. "
This is precisely why price moves. When liquidity at a price ends, liquidity at another price takes over. That is the current bid and ask. If there are no traders willing to give the price you want you go down in price. At some point you WILL be filled. Therefore liquidity is infinite. Unless that end of the world stuff. Maybe I'm just thick but, I can't see how liquidity isn't infinite. Move the price and participants will jump in. Am I missing something here? This is the futures market, a bet on the future price of an underlying, right?

 

[new_trader]

This is the futures market, a bet on the future price of an underlying, right?

Not really, it is a contract to take or deliver the underlying upon expiry of the contract if it is physical, which is in the future. I suppose you could argue that if someone is buying today they are betting that the future price will be higher. But if you are taking delivery, you are paying today's price.

 

[wallstreetwarrior87]

In any (futures) market, participation is always limited, yet the opportunities (to trade) are unlimited.

This is why markets work in cycles, with various levels of participants involved. Hence the need for games to be played within any cycle.

The hardest part (well maybe not for everyone) is trying to work out the absolute amount required to move the market from A to B when there is an infinite number of contracts available. So, there for we need a rough estimate to be able to detect when genuine buyers/sellers have been used up in the relevant market cycle you are concerned with.

So liquidity can only be possible via the use of market orders (which stops are), and this is how price moves, as if everyone sat on limits nothing would happen.

So to confirm (only IMHO); Liquidity (the opportunity to trade) in futures markets is always infinite, just not the participation.

Why?

Access to funds, cash, moolah. People trade well above their means. Once they have tied their capital up, that's it, they are in until they close out.

Yes I understand the debate about margin, and it is a 2 way argument; the trader who is winning can add onto a position, whilst the trader losing can only sit in their trade until they close or are forced to (stopped).

Just because you can grow as many apples as you want, does not mean you will be able to sell them (at any price). Its just that apples get thrown away.

 

[wackypete2]

So, after 217 posts can someone tell me what the price of apples is? I'm looking to buy them on the cheap.

Peter

 

[random12345]

So, after 217 posts can someone tell me what the price of apples is? I'm looking to buy them on the cheap.

Peter

You need yourself a cider-based HFT.

UK and US regulators fine trader £3m for manipulation of oil market - Telegraph

 

[rsh01]

But if you are taking delivery in the future, you are paying today's price + cost of carry etc.

amazing how threads gain momentum, its like a trend, an arena of participants with dualistic aims (like buyers & sellers/demand & supply), to see who prospers.....only noone wins in this one.