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Strategies & Market Trends : Trading For A Living -- Ignore unavailable to you. Want to Upgrade?

To: Colin Cody who wrote (587)	6/27/1998 11:20:00 PM
From: Eric P	Read Replies (2) \| Respond to of 1729

Colin: What does this mean (from their site): Do you allow for multiple accounts to trade "boxed" issues?ÿ Yes. I think I can help with this question. Sometimes a daytrader will open two cross margined accounts for his/her trading. In one account, he will open long positions in several stocks (example: Long 1000 shares of DELL, INTC, MSFT). In the other account, he will initiate short positions in the same stocks (i.e. Short 1000 shares of DELL, INTC, MSFT). He now has three 'boxed' positions and his net exposure is zero. The purpose of this maneuver? When the market begins to drop like a rock, the trader can now easily initiate a net short position by selling stock in his long account. Note that long stock can be sold on both upticks and downticks, but a short position can only be initiated on an uptick or at a price of at least 1/16 above the inside bid price. To my knowledge, this is the entire benefit of a 'boxed' position. ==> To enable a trader to effectively short a stock that is dropping quickly, without waiting for an uptick. Also, I believe that the margin requirement for maintaining a 'boxed' position is only ~5% of the value of the combined position (?). -Eric

To: Colin Cody who wrote (587)	6/28/1998 12:31:00 PM
From: funk	Respond to of 1729

Tell me about your MBtrader. I'm at their site mbtrading.com and looking the your sample L2 screen for DELL. I am not happy that the TIME of the MM's update isn't there. I use the TIME all the time. Can you see the time on your L2 screen? Absolutely. There are the following options on the level II ... BID ASK SHOW TIME SHOW SECONDS SHOW STATUS SHOW #BEST SIZE <<<<< is always on SHOW DIRECTION <<< a bit of a misnomer it shows if the MM moved his bid up or down in the stack and by how much... ie, if the bid side shows lots of +1/4 +3/8 etc it means the MM's are biding each other up the same info if selected is shown on the ask side, It is very useful. Do they really provide this info? Really! <gggg> Do you get L2 style MM information for OTC-BB stocks, like MSIA or FTEL for example? Yes BB quotes, charts, LII, but no execution system on BB's If you have a BB in your account from a transfer or a delisting, they can unwind your position for you with a phone call. OK the boxed issue issue.... check this out, two very real reasons stocks are boxed.... You are short a stock, you fully intend on being short this stock for a week or two, you are in the money, it is sliding, and you know what can go wrong will go wrong, so every day 40 minutes before the close, because 30 minutes before the close is too late, the stock will already be running on short covers, you box the stock, in the morning, maybe even pre market you sell the long position and go short for another day. you ride the slide, and you eliminate the risk of overnite news. You have more control, more safety, and you sleep a little better. Reason two, you trade one or two stocks. Lets say all you do is trade ASND, thats it, you are always looking around, but most of your effort is put into assimilating information that relates to your stock. In one account you establish a short position, at the proper time. When it is time to cover, you use the box account and buy two times the number of short shares. now you are long and you reduced your commissions by 50% <<< this would be especially useful if you are paying , as you said, 1000$ per ticket. Some traders, work like that, they follow a stock up and down. Obviously these examples are limited to only a few traders and have nothing to do with people who trade many times in one day. How much DELL can I buy today? $20,000? $30,000 or $40,000? I assume as soon as a sell DELL I can buy up to by intra-day margin limit again, and again, right? Right. funk