That spooky trade netted me a point. God's gift to me for the day I am afraid.
I would like to hang out and find a place to go short but methinks I shall run the risk of losing less money at the Wednesday afternoon gin game.
The risk inherent in the futures is $250 per contract per point. It requires perhaps about $10,000 to control one contract which equates, I believe, to about $600,000 worth of stock.
(In case you would like to take delivery. I imagine it would be a lot less messy than taking delivery on a contract of Hogs, but I don't know if a bare-footed Texan would be annoyed by that or not.)
Anyway, trading S&P futures is primarily Risk/Money Management, like anything else. Except in the fastest of markets you have a reasonable chance of avoiding too much slippage. For example, my reversal was at 1040.40 and I was filled at 1040.50. Slippage equaled $25 per contract. (Even during that wave of short-covering blowing the top off the futures market).
As I said, I had no idea where I would be filled going flat, but as the TRIN was at oversold levels going up I had a feeling I would be okay on the exit.
In essence what I am trying to say is, unless the market gets very fast one has a reasonable chance of covering his/her butt with a properly placed stop order.
Conversely, I know a fellow who went out on a day in November of '96 and forgot to place a stop. He remembers the exact date for some reason, and never forgets to place a stop anymore.
He returned from walking his dog to find he lost 1 million in one day.
Only in America. Well, this market is bogus, I'm going to play cards. See you later. |
