RS:
----->elaborate a bit on the trading of Nasdaq vs. listed securities.
On this thread , as well as many others on SI, reside many investors/traders who have much more knowledge than I, all of whom would be more capable to answer you.
But, I will make an attempt.
As my earlier posting was concerning short sales, I think it proper to limit my comments to that area.
The reasons that I prefer listed as opposed to NAZ for shorting ---
1) perhaps the main one -----
no MM to go through to complete the trade .......
only a specialist who is matching buys and sells and is not trading against me.
NOW,
this statement is not made to vilify the MM, for I feel that the purpose they fulfill is VERY important to the maintaining of an orderly and properly functioning market, and their markup on trades is only fair profit for the risk to which they expose themselves and their principals ( side note ---- that's principals, not principles ....gggg).
The unfortunate part of the MM type of operation (Naz) is large and numerous abuses by many brokerage houses and employees.
But, enough of that, for it will stir up more than I care to answer.
2) calls for replacement of borrowed stock, which mean a close out at a time not of my choosing, have been in my past trades, been non existent for listed stocks, but the NAZ ones appear ( and this is my personal thought) to be subject to trading house induced short squeezes.
3) most, if not all, of my short sales come about because of basing the trade on F A.
The usage of margin , for me to trade within self restricted limits, is precluded from trades in which I can envision a position being held for a period to exceed 2 weeks.
Most of my short trades last longer than that.
The temptation to speculate on lower priced stocks is removed , by and large, by restricting myself to listed equities.
There are MANY more reasons, but these three cover probably 80 % of them for my method of investing.
On the other hand, I trade index options nearly daily, and a "normal" ownership time frame is less than an hour.
This trading is done with some FA, but mostly TA.
On these quickies, I really don't consider anything but trying to capture some profit from the immediate movement of the index and trade accordingly ----- puts and calls, buys and sells.....
Hope this helps some.
Regards --- Nemer |
