4 stars based on
I have asked a number of people but have not yet obtained a satisfactory answer. On any given trading spi 200 options trading strategies a multitude of people trade the top Australian stocks, with little or no concern for the trajectory of the SPI.
I for one trade off a 1 min. This indicates that neither group is attempting spi 200 options trading strategies mimic the other. How is it then that the trajectory of each is uncannily similar; even spi 200 options trading strategies each is compared on a 1 min intraday chart? The SPI and the XJO follow the same daily trajectory because they are essentially the same thing, an instrument representing the weighted average mean of the top shares on the ASX.
The SPI is a forward looking contract however and so it runs at either a premium spi 200 options trading strategies a discount. In the bull market leading up to Spi 200 options trading strategies, the SPI was trading at a 10 to 20 point premium at any given time, representing a forward view that the market was pricing in a higher future value for the Index.
The SPI is an instrument used to bet on the forward price. If the institutions have spi 200 options trading strategies selling orders or are aware of large selling orders coming through, then they will short the SPI ahead of the selling. Likewise if they have large buying orders or there is generally a lot of buying coming in then they will buy the SPI.
Many large orders come in from US institutions. This helped me determine the feeling of the market and see where the institutions were heading. The bigger institutions trade an arbitrage between a basket of index stocks and the SPI. Back in the days when you could see broker codes you could see the activity by the big brokers in the SPI.
Small traders usually end up as fodder for the big desks. The big institutions rebalancing their portfolios and actioning large corporate orders for stock are also hedging on the futures market. That is why there is a direct and strong correlation. The views expressed in this article are not intended as general advice. TheBull's free daily and weekly newsletters.
Click here to receive TheBull's free weekly newsletters on stocks, trading, investing and more. Are share buybacks a positive or negative sign? How smartphones are heating up the planet. Protect your portfolio from market wobbles Don't wish to crystallise a profit and be fronted by a tax bill? Think the ASX is due for a tumble? Learn how to hedge your bets using CFDs. Big data lets global corps bet on the threat of climate change The recent news of Monsanto?
How are CFDs taxed? Stephen Calder clears up the confusion surrounding the tax treatment spi 200 options trading strategies CFDs. Scaling into a position. Practise crafting your CFD trading strategies. Losses can exceed deposits. Friday 06 April, 1: Market Summary Charts Code Lookup. TheBull's free daily and weekly newsletters Click here to receive TheBull's free weekly newsletters on stocks, trading, investing and more. Reduce your trading costs. Finance Week for April 2.