-2 Ways to Skin a cat-
There are many types of investors with two generalizations being long term and short term. Within each of these broad classifications, there are also subclassifications. I was hoping to spur a discussion regarding short term trading, the various types of traders within this grouping and where and how they have met with sucess.
To start, let me offer up my classifications. I find their are essential three classifications, position traders, daytraders and scalpers.
Position traders: those who might buy or short a stock for a particular run which generally might last well beyond the current trading session. Most position traders I have known have time frames which extend anywhere from 2 days to 6 months, accumulating a position in anticipation of some specific event.
Daytraders would be defined, in my book, as those interested in buying stock during the trading session with the anticipation of selling it during the trading session or soon thereafter. I wouldnt necessarily say that for me to classify someone as a daytrader, they would need to go home flat each nite. But they are clearly not looking to hold it until next week or beyond. That is not to say, as well, that I feel it is prudent for a daytrader to take home positions, yetI have seen successful daytraders pickup positions near the bell guaging momentum and do quite well. I have also seen many get killed doing so.
Scalpers would be the true daytraders. Those looking to buy abcd at 6 and sell it moments later at 6 1/8. Clearly any trader who buys stock at 6 would desire to sell it at 6 1/8 rather than 5 1/2 if it is tanking, yet the scalper would be the person uninterested in what the stock might do tommorrow or next month, let alone later today.
Many have asked about our firm and its ability to service these particular traders. I would say that in addition to doing quite well with long term investors, portfolio management etc., our Trading Desk is most apt at handling position traders and daytraders. That is simply our "market". I simply don't have that many traders that are scalping for teenies. To some degree its a small portion of the market. Its definately not our market.
That is not to say that our execution systems, autofill systems and other system can not handle scalpers but Ijust dont think that any auto-system, or a firm like yamner, can handle the scalping for teenies and eights. Its partly the firms, the Nasdaq in general, but more importantly its the stock.
I had a trade today that one client had felt was less than good and which I felt was above par. It was some teenie stock that the client wished to buy a few k of. The stock, at the time, had traded 9million shares in 2 hours and was up 100%. When the client came in, the stock was offered at 7/16, one offer, not an ECN,and they eventually got filled 2k at 1/2, if I recall. I considered using REDI which would have started with ECNS and finished with a market maker, yet went to an autofill system instead. nothing at 7/16, yet with it trading 200k a minute, i dont think anything would have been there at 7/17 and 2k at 1/2 with only 800 there...reasonable. The client got ticked. To be quite honest, I thought it was a pretty good fill considering the heavy volume and illiquidity give its meteoric rise and huge volume.
I guess this post comes down to this...I would love to know from those out there doing the scalping what systems you are using, who is doing the trades, how your trades are going, are you getting autofills, are you relying more on ECNS than other systems, etc?
I have no qualms about not being everything to everybody. I am just curious what others, targeting that market, scalping for teenies and 1/8ths are experiencing. Maybe through this discussion we can learn a little about trading, systems and technologies. I think there are many out there who say, "wow, abcd, traded 1 to 2, back and forth 20 times during the day, etc! I could have made a fortunte". I would love to know from those trying to make THAT fortune, hows it going? and what you are doing to make it work?
To me, this is the value of this site..the ability for traders of all levels of experience to share their knowledge.
Regards,
Steve@yamner.com |
