Naz
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Oatman,
The DIA is the DOW tracking stock.Whatever the DOW is doing the DIA will almost mirror it.If you see a move on the DOW just get in on the DIA and it will move the same way.Its one of the fastest ways to trade the DOW without any shenanigans that you get from the sb companies.
The DIA is the DOW tracking stock.Whatever the DOW is doing the DIA will almost mirror it.If you see a move on the DOW just get in on the DIA and it will move the same way.Its one of the fastest ways to trade the DOW without any shenanigans that you get from the sb companies.
Naz, I know about ETFs, but i am more interested in trading cash indices and not something that replicates them (DIA,SPY etc). Therefore I am looking for the companies that provide that kind of services. I have already found one (see my posts above). Can you recommend any other ones?
Bigbusiness
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I don't think you can trade a cash index. CFD's and spreadbets seem to follow the futures. There are index trackers but I think they are more of a longer term option.
balusa
you can probably find a company somwhere that will trade anything -but anyone that lets you trade the cash index for real is either gonna take you to the cleaners on costs - or someone is going to take that company to hedge hell and blow them out - either way you will lose out
trading is hard enough - stick with real companies and real trading opportunities - whilst the dia and spy are only low leverage futures contracts - learn to trade them or the futures - no point trying to trade the cash unless you are an arber
you can probably find a company somwhere that will trade anything -but anyone that lets you trade the cash index for real is either gonna take you to the cleaners on costs - or someone is going to take that company to hedge hell and blow them out - either way you will lose out
trading is hard enough - stick with real companies and real trading opportunities - whilst the dia and spy are only low leverage futures contracts - learn to trade them or the futures - no point trying to trade the cash unless you are an arber
there are people who would offer the cash index for real - but i am sure they will get stung real bad doing that or just cream off so much money to cover themselves that you woudl not want to trade with them
but if someone dives in - let us know how you get on
but if someone dives in - let us know how you get on
Correct me if I am wrong...Perhaps, I do not understand something...But what is wrong with trading in cash indices? You are telling me that a cash index follows the futures, but how that can be? I thought that Dow and S&P did not follow anything and that they float on their own...Can anyone please explain? And also, why people who offer such kind of trading will necessarily take me to the cleaners? The issue is rather sensitive for me, because I have been studying index behaviour for quite a while, which is why I want to trade in cash indices, not ETFs
balusa
sometimes cash follows futures - sometimes futures follow cash - etfs will follow a liquid futures contract - the dow is gonna be a bit different due to illiquidiyy in the contract that will produce aberations
a cash index is not a tradeable contract - its a value arrived at by a calculaton based on the stocks that make up that index -to repilicate it - the liquidity of all the underlying stocks would haev to be such that you could at the same intstant - buy them all - in exactly the same ratio
you can set up easier systems do this by using a fewer number of stocks which in general would represent the index - but all sorts of other issues come in
hence etfs and futures appeared - but by logic these will either follow or lead the cash as sentiment of investors change
the fact you chose to look at cash indicies may in part give an indication of your knowledge of trading - and since knowledge is acquired over time - this maybe a time to step back and ask yourself why you feel as a learner that just because you chose to study cash indicies - why do you feel that that was the right thing to do?
in trading - try to see what the professionals are doing - and then choose the optons open to you - thats how you make money
sometimes cash follows futures - sometimes futures follow cash - etfs will follow a liquid futures contract - the dow is gonna be a bit different due to illiquidiyy in the contract that will produce aberations
a cash index is not a tradeable contract - its a value arrived at by a calculaton based on the stocks that make up that index -to repilicate it - the liquidity of all the underlying stocks would haev to be such that you could at the same intstant - buy them all - in exactly the same ratio
you can set up easier systems do this by using a fewer number of stocks which in general would represent the index - but all sorts of other issues come in
hence etfs and futures appeared - but by logic these will either follow or lead the cash as sentiment of investors change
the fact you chose to look at cash indicies may in part give an indication of your knowledge of trading - and since knowledge is acquired over time - this maybe a time to step back and ask yourself why you feel as a learner that just because you chose to study cash indicies - why do you feel that that was the right thing to do?
in trading - try to see what the professionals are doing - and then choose the optons open to you - thats how you make money
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I respect the professionals, but I still want to trade in cash indices, despite the fact that it is not a common occurence in trading. I have good reasons to believe that I will do successfull trades here 
. So, could you please explain why it is riskier to trade in indices than in ETFs.
Thank you.
. So, could you please explain why it is riskier to trade in indices than in ETFs.Thank you.
But an 'index future' is not an ETF.... maybe I really don't understand your question.
And a liquid ETF is going to track the cash index very closely as will the future, so what's the problem?
Cash indices are not themselves traded on any exchange in the world which makes them riskier.
And a liquid ETF is going to track the cash index very closely as will the future, so what's the problem?
Cash indices are not themselves traded on any exchange in the world which makes them riskier.
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Trader333
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Balusa,
You cannot officially trade an index. Any company that offers index trading is either:
1) Creating their own version of it for you to bet on
2) Using a variation of the Index future to base the price on it
I dont know why you are sensitive to this. I also studied Index behaviour and found that it would have been easier to trade if there had been a true index instrument to trade as opposed to the Index future. The closest you will get will be with a SB company in my view.
Paul
You cannot officially trade an index. Any company that offers index trading is either:
1) Creating their own version of it for you to bet on
2) Using a variation of the Index future to base the price on it
I dont know why you are sensitive to this. I also studied Index behaviour and found that it would have been easier to trade if there had been a true index instrument to trade as opposed to the Index future. The closest you will get will be with a SB company in my view.
Paul
balusa
you can trade the pure cash index - but not with any company that comes under US or European jurasdiction
and to some extent you have had your original question answered - you want to trade the cash index - no one seems keen - you have been told it is expensive - no one had any other names for you - but you want to do it anyway and you already have a company who you said can do it
go for it - make tons of bucks and come back and buy all of us a drink
you can trade the pure cash index - but not with any company that comes under US or European jurasdiction
and to some extent you have had your original question answered - you want to trade the cash index - no one seems keen - you have been told it is expensive - no one had any other names for you - but you want to do it anyway and you already have a company who you said can do it
go for it - make tons of bucks and come back and buy all of us a drink
Bigbusiness
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you cant exactly "get" zero spread on the dia - but occasionally the spread will go to zero or could even cross - but it could pull way out - same as the qqq
and it dont mean that much because zero or crossed spreads only happen occasionally when no one is sure whats gonna happen - so may not be the best time for you to rush in for a trade - and just because you might get in on a zero spread - dont mean you will get out on one - might be two points - could be anything
i am not sure why the zero spread was pointed out - since the orginator of the thread was only interested in the cash index and the diamonds are no more related to the indu ( dow cash) than the futures contract is - in fact the diamonds is far more related to futures than the cash -but it still runs in its own little world regardless
the dia does have liquidity - but not the leverage of futures - so you are far better to trade the s&p emini - best leverage and liquidity
and it dont mean that much because zero or crossed spreads only happen occasionally when no one is sure whats gonna happen - so may not be the best time for you to rush in for a trade - and just because you might get in on a zero spread - dont mean you will get out on one - might be two points - could be anything
i am not sure why the zero spread was pointed out - since the orginator of the thread was only interested in the cash index and the diamonds are no more related to the indu ( dow cash) than the futures contract is - in fact the diamonds is far more related to futures than the cash -but it still runs in its own little world regardless
the dia does have liquidity - but not the leverage of futures - so you are far better to trade the s&p emini - best leverage and liquidity
Bigbusiness
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I haven't seen a time when there was even a small spread on the DIA. I hope Naz can give us some more information about how he gets it.
as i said - he doesnt get it as such - his post was just misleading -since he was making it sound like you could take advanatge of that all the time - you cant -as you have seen - its a cent or 2c normally or more - but if you watch it all day - you will probably catch it at zero at some point
but even then sugesting that there is an advatage of it being at zero is a bit misleading as its not really zero - since either the ask or bid is gonna be right - so depending on wether you go long or short - you might be at the right price and next moment the spread will pull out to 2c and you really entered a 2c spread
and of course you still need to exit the trade- a lot forget that - and you could get sqeezed for 2c or more there - you never know
but even then sugesting that there is an advatage of it being at zero is a bit misleading as its not really zero - since either the ask or bid is gonna be right - so depending on wether you go long or short - you might be at the right price and next moment the spread will pull out to 2c and you really entered a 2c spread
and of course you still need to exit the trade- a lot forget that - and you could get sqeezed for 2c or more there - you never know
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