Some questions re: futures trading SPI200

[Gringotts Bank]

Hope someone can help with these questions, I want to learn about trading SPI, thanks.

- Do most SPI traders trade the futures contract with the nearest expiry, say Dec 11?
- What is the SPI SPOT?
- Do futs markets get manipulated any more/less than ordinary shares on ASX?
- What special considerations should one make when moving from ASX share trading to SPI trading?
- There's a lot of SPI threads on ASF - anyone know the best noob threads?

 

[skyQuake]

Hope someone can help with these questions, I want to learn about trading SPI, thanks.

- Do most SPI traders trade the futures contract with the nearest expiry, say Dec 11?
Neartest quarterly contract
- What is the SPI SPOT?
No spot, just futs. Though spot is technucally XJO (Asx200)
- Do futs markets get manipulated any more/less than ordinary shares on ASX?
Its pure supply and demand and ppl trying to screw each other... So maybe a bit more than stock? Less ramping though
- What special considerations should one make when moving from ASX share trading to SPI trading?
Trades faster, does more silly things
- There's a lot of SPI threads on ASF - anyone know the best noob threads?

 

[skc]

- There's a lot of SPI threads on ASF - anyone know the best noob threads?

Prob not an instrument for noob...

 

[Gringotts Bank]

Thanks skyquake. Could you elaborate on the "silly things" bit please?

skc?? Got to start somewhere.

 

[skc]

skc?? Got to start somewhere.

Fair enough but SPI is known for being difficult to trade. If you are trying to read market depth and scalp, SPI may not be the best place to learn.

 

[Gringotts Bank]

Yep, still practising with LYC at the mo. Others have mentioned that SPI might be a better instrument if/when I can do it with LYC. Just using this time to bone up on anything SPI related.

Is it the volatility that makes it so much harder?

 

[tminus]

Usually the SPI200 futures follows the SP200 index, I have noticed there is an offset which decreases as we move towards the expiry date of the contract. Like yesterday the offset was 4 points.

But today the Dec 15th SPI200 futures had an offset of around 10 points ( I expected smaller), and it took longer for the lines to merge.

Yesterday opening



Today Opening



Is it because some of the stocks opened really late today? Where is the best place to get news on delay in openings.

 

[nomore4s]

Is it because some of the stocks opened really late today? Where is the best place to get news on delay in openings.

It is probably because that contract expires today.

Not sure what you mean by some of the stocks opened really late today though. No delay as far as I can see.

 

[cutz]

It is probably because that contract expires today.

Not sure what you mean by some of the stocks opened really late today though. No delay as far as I can see.

The last lot didn't open till 10:16.

 

[skyQuake]

Usually the SPI200 futures follows the SP200 index, I have noticed there is an offset which decreases as we move towards the expiry date of the contract. Like yesterday the offset was 4 points.

But today the Dec 15th SPI200 futures had an offset of around 10 points ( I expected smaller), and it took longer for the lines to merge.

Yesterday opening
View attachment 45534


Today Opening
View attachment 45535


Is it because some of the stocks opened really late today? Where is the best place to get news on delay in openings.

1. Our ASX 200 index actually follows the SPI Futures most of the time.
2. ASX 200 Index (XJO) is a staggered open. On index expiry days (like today), the staggered open takes twice as long.
3. Futures will generally be different to XJO - cost of carry and dividends.

 

[skc]

Is it because some of the stocks opened really late today? Where is the best place to get news on delay in openings.

On a normal day, the SPI and cash are in-sync by 10:09 when everything is opened.

On expiry day, last cash opens at 10:16... so the apparent increase in "offset".

The day to day changes in offest as we move closer to expiry are due to cost of carry and dividends as SkyQ said.

 

[tminus]

Thanks all for your answers.

 

[Punta]

1. Our ASX 200 index actually follows the SPI Futures most of the time.

This seems strange to a know-naught like myself.

How do the all-seeing, all-knowing index futures traders know so much about the "market" that the fundamentals of the ASX200 diligently fall in line??

Which individual stocks that make up the ASX200 take up the slack between the current ASX200 value and the SPI future price? The current ASX200 is supposedly set by the consumate rational market player that understands the ins and outs of each individual company - but when some players think that "the market" will rise, all the stocks in the ASX200, or a representative majority, duly follow suite?

I could understand it if the SPI and ASX were based on a specific sector, but it seems weird when it is, by construction, a cross-industry metric.

Yours in confusion,

 

[tminus]

Another SPI Futures trading question, today the futures were indicating the market would open 0.5% higher.
But when BHP opened at 1.8% higher, I thought there was a major underestimation and went to long SPI, but rather than going up it went down 4 points lower and ended up hitting my stop. Then me trying to chase it to get back in after it rebounded cost another 5 points (luckily I am using a paper account).

I was wondering what would cause this downward movement to happen.

 

[Wysiwyg]

Another SPI Futures trading question, today the futures were indicating the market would open 0.5% higher.
But when BHP opened at 1.8% higher, I thought there was a major underestimation and went to long SPI, but rather than going up it went down 4 points lower and ended up hitting my stop. Then me trying to chase it to get back in after it rebounded cost another 5 points (luckily I am using a paper account).

I was wondering what would cause this downward movement to happen.

There is probably an explanation but if so it is well guarded and would no doubt be ambiguous.

My data states that the two largest S&P/ASX 200 stock, that being BHP & CBA, both increased price from 10.02 a.m. to 10.03 a.m. today. I would think this fact would lift the Index for that 1 minute period. Did they?

 

[skyQuake]

Another SPI Futures trading question, today the futures were indicating the market would open 0.5% higher.
But when BHP opened at 1.8% higher, I thought there was a major underestimation and went to long SPI, but rather than going up it went down 4 points lower and ended up hitting my stop. Then me trying to chase it to get back in after it rebounded cost another 5 points (luckily I am using a paper account).

View attachment 45764I was wondering what would cause this downward movement to happen.

A 4 pt retrace is quite natural...
Also you might consider selling BHP rather than going long SPI. dog wagging the tail etc...

 

[tminus]

My data states that the two largest S&P/ASX 200 stock, that being BHP & CBA, both increased price from 10.02 a.m. to 10.03 a.m. today. I would think this fact would lift the Index for that 1 minute period. Did they?

Yeah BHP & CBA make for 20% of the weighting of the SP200, the top 10 stocks make up 50%

A 4 pt retrace is quite natural...
Also you might consider selling BHP rather than going long SPI. dog wagging the tail etc...

Do you know what causes the retracement, it's just that the only way I remember things is if I can visualise it.

I find that after a large jump the shares in the company don't fall much as 'smart money' seem to come in an and start selling their shares they have accumulated. When BHP is on a run it raises the SPI and people end up buying other companies. Feeding into the run, and you could make quick money on the futures. Shorting BHP after it's peak is a good idea, but the commissions are a killer $160 compared to $10 (100K trade both ways).

 

[skyQuake]

Yeah BHP & CBA make for 20% of the weighting of the SP200, the top 10 stocks make up 50%


Do you know what causes the retracement, it's just that the only way I remember things is if I can visualise it.

I find that after a large jump the shares in the company don't fall much as 'smart money' seem to come in an and start selling their shares they have accumulated. When BHP is on a run it raises the SPI and people end up buying other companies. Feeding into the run, and you could make quick money on the futures. Shorting BHP after it's peak is a good idea, but the commissions are a killer $160 compared to $10 (100K trade both ways).

Mate you cant get hung up over a 4pt move. There's 50 or so like that in a day. It could have been any number of factors - profit taking, arb bots selling it against S&P (which wasn't going up), someone pushing the SPI around etc...

Also the move on the SPI was not resource driven today. It was financials driven. BHP did basically nothing while the banks powered on till lunch.

 

[tminus]

It could have been any number of factors - profit taking, arb bots selling it against S&P (which wasn't going up), someone pushing the SPI around etc...

Thanks

Also the move on the SPI was not resource driven today. It was financials driven. BHP did basically nothing while the banks powered on till lunch.

I liked to think that BHP kick started it and the others followed, the surge wouldn't have been if they didn't follow.