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Strategies & Market Trends : SOES Trading

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To: desTROYer who wrote (1193)	1/16/1998 6:30:00 PM
From: Jay Morrison	Read Replies (2) of 1618

As I understand SOES trading at a firm like Block Trading or another, the typical trade is something like this.... Buy 1000 shares of XYZ stock, try to make about 1/8 point on it, sell the 1000 shares. That would produce a profit of $125 before commisions. The commision is $20 for the buy side and $20 for the sell side. So after it is all done, you have a net profit of $85. But, if it was a losing trade you are down $165. -$125 for the 1/8 point and -$40 for the commisions. It would then seem to me that a trader must average at least 66% of his/her trades to be profitable in order to be just a breakeven trader. This question is for anyone with experience. Is my math off or have I missed something critical? It would seem to me that this is the primary reason it is tough to make money as a SOES trader. Any comments welcome, Jay

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