Why Trade the FTSE ?

[LION63]

Are you saying that if there is say a 10 point rise in the Futures then the FTSE shoud/will rise by roughly the equivalent which in turn means there will be a rise in the share prices of the constituents?

 

[Hooya]

it's very complex subject imo and some of it's beyond my knowledge but indraday price movements are controlled my many factors.General market sentiment is likely to be represent in futures price much better than in a basket of 100 stocks as obviously these are influenced by many other small factors. There is a very tight relationship between the index price and the futures, especially with amount of program trading
that goes on these days.Also the amount of hedging and arbitrage that goes on as well. It is very probable that on a intraday pricing that futures can lead the cash index but what is certain the assumption of " the individual constituants rise or fall, changing the index price and thus the futures" is too simplistic for today's market.

edit:- I trade an sb price which we all know is based on the futures off a Cash index chart and TA. If the cash led the futures I would be laughing. Unfortunately IM not

 

[Roberto]

I trade an sb price which we all know is based on the futures off a Cash index chart and TA. If the cash led the futures I would be laughing. Unfortunately IM not

Absolutely. For all daytrading purposes, this is the point.

 

[LION63]

Would it be fair to assume that the DOW, S&P and NASDAQ are also indices that track the futures more often than not? What about the DAX? Is there any way that you know of that the fleet of foot 'little guy' can profit from this knowledge?

 

[Hooya]

imi sure they all behave similarly. As the relatioship bewteen the two(cash and futures) is so interlinked I doubt that there is anyway for us little guys to profit from any leading or following

 

[harryc]

Would it be fair to assume that the DOW, S&P and NASDAQ are also indices that track the futures more often than not? What about the DAX? Is there any way that you know of that the fleet of foot 'little guy' can profit from this knowledge?

More often than not is indeed the case . If anyone PM's you re : the knowledge for the 'little guy' tell us , hehe.

very handy for anyone trading the indices via SB to have access to real-time futures prices

 

[rossored]

More often than not is indeed the case . If anyone PM's you re : the knowledge for the 'little guy' tell us , hehe.

very handy for anyone trading the indices via SB to have access to real-time futures prices

Well, not really. The SB brokers tend to factor in anyone who might be doing that nowadays. However, there are posts by members on this board who used to exploit the SB 'bias' by doing just that - until the SB companies wised up to it. I shouldnt think for a moment that it offers any advantage now - certainly I cant see it in live futures data versus SB price ; by the time you've noticed it on one chart, its already reflected in the other.

 

[harryc]

Well, not really. The SB brokers tend to factor in anyone who might be doing that nowadays. However, there are posts by members on this board who used to exploit the SB 'bias' by doing just that - until the SB companies wised up to it. I shouldnt think for a moment that it offers any advantage now - certainly I cant see it in live futures data versus SB price ; by the time you've noticed it on one chart, its already reflected in the other.

Hey Rosso I didn't mean that there was an advantage in doing that , and you could benefit through the Spreads . Just handy to know what the Futures are doing . I for one could never just trade Spread Bets by watching the SB price moves , but then again I moved over to exclusive futures trading only a year or so ago .