US or Aussie Stock Market?

[arthuryeo]

Which is better to trade in? US or Aussie Markets especially for options.

Given that we can get information on US market (e.g. when Dows goes down) and that Aussie Stock Market is likely to follow, is this a good signal in regards to the direction that the Aussie Stock Market is likely to move.

Can anyone enlighten me on this please? Thank you.

 

[xtanda]

Re: US or Aussie Stock Market

In my opinion, US market is better than AUS by far, particularly for option trading

PRO:
- the market is more liquid, less prone to manipulation by market maker
- the size of contract in US option is 100, compare to AUS' 1000
(good for us that not have big capital money)
- The number of company that got option is huge compare to AUS,
also the premium is better.
- The company relatively have much bigger capitalization
(i.e compare top 200 US company vs top 200 AUS company)
hence, the company is more stable/powerful against problems
- Can do day trading without giving up day job
- ....

CONS:
- to follow the market have to get up early/stay late at night
- the company is not the name we hear from day to day as we did not live
there, hence we aren't familiar with their domestic issue
i.e: we are more familiar with "Bunning" than "Home Depot"
- Forex rate give additional paper work especially for tax time
-.....

 

[arthuryeo]

Re: US or Aussie Stock Market

Thank you. Possible to get proficient with trading without giving up my day job.

regards,

Arthur

 

[andfvp]

I think the US market is much cheaper and liquid for option trading. I constantly compare the US and Aussie markets and find that apart from being cheaper and more liquid, it is more transparent and greater competition means transaction costs are lower. Free trader features on even the online trading sites (like TDAmeritrade or eTrade USA) are much better than those available for premium traders in Australia.

Andy.

 

[sails]

I traded Oz options for over five years and just in the last couple of months have shifted my trading to the US.

The reason for moving my trading is a combination of a few factors. The fees (not only broker fees but ASX charging $1.12 for every option contract traded) were eating too much into profits. Also Oz data is expensive. Trading spreads was cumbersome where the mid price had to be worked out manually.

What really tipped me over the edge was the Oz MMs refusing to quote or respond to quote requests during some high volatility near January expiry - even on BHP which I was trading at the time. I heard they were fined, but apparently no guarantees that it won't happen again.

Another difficulty with Oz options is that the MMs can take up to the first hour before quoting. Nothing... not even wide spreads. On the occasions I requested a quote early in trading- usually no response ...

Totally agree with xtanda that the night time trading is the worst thing. Hadn't thought about the forex rate being a problem at tax time - will have to find out more about that one.

I really like the ThinkorSwim software for US trading - it all comes free and they are constantly adding to it. The last release has added a back testing facility which is pretty cool. The features are too numerous to list here and the only way is to go through their tutorials. You can demo their software with a paper trading account (I believe without funding a live account) to get a feel for it. http://www.thinkorswim.com/tos/client/index.jsp

I understand their fees can be negotiable and have heard that they will match other brokerages. I was able to get the ticket charge removed at this stage. They also give a lot of free education and have found their support excellent. Anyway, FWIW, that's my experience so far... but then the last broker I really liked just went bust