thks ullastp for the info!
actually i am surprised, how they are managing it with these kind of discounts! ru sure these are margin related discounts OR any other kind of discounts? can u give a practical example for that!
though s&p500 & djia & nasdaq are closely related, even a 1% deviation in their pair trading (which is common nowadays) can play havoc on shortfalls! forget the crudeoil & natgas pair which can wildly swing on inventories announcement day! why to get into sumthing when its is getting automatically squared up to only see the trade moving in ur direction!
actually i am surprised, how they are managing it with these kind of discounts! ru sure these are margin related discounts OR any other kind of discounts? can u give a practical example for that!
though s&p500 & djia & nasdaq are closely related, even a 1% deviation in their pair trading (which is common nowadays) can play havoc on shortfalls! forget the crudeoil & natgas pair which can wildly swing on inventories announcement day! why to get into sumthing when its is getting automatically squared up to only see the trade moving in ur direction!
Hi Malgohft,
Actually INTERACTIVE BROKERS (IB) in US market giving a huge discount for pairs trading and that is not for all pairs. For index futures they are giving thats for Dow jones Vs Nasdaq, S&P 500 Vs Nasdaq and also for Crude Oil Vs Natural Gas, Crude Oil Vs Heating Oil etc.
And so many other brokers in US also implemented the same.
I think Indian regulators are very tough on such discounts and thats why no brokers giving discounts. One can say thats why Indian Financial System is stronger even when the sub-prime crisis/recession occurred in 2008 than other countries.
But one can think logically, in case of index futures one single index wont collapse in a single day, all other index also follow it, if its in the same market/country. Likewise WPI Crude Oil, Natural Gas and Heating Oil are all coming from a single raw material. Thats why they are giving discount and they also cut our positions automatically if one is running shortage of capital in extreme cases.
Recently Interactive Brokers started its operation in India, but so far they are not giving any discounts in Indian market. That may be becoz of strong regulations from Excange and SEBI.
Actually INTERACTIVE BROKERS (IB) in US market giving a huge discount for pairs trading and that is not for all pairs. For index futures they are giving thats for Dow jones Vs Nasdaq, S&P 500 Vs Nasdaq and also for Crude Oil Vs Natural Gas, Crude Oil Vs Heating Oil etc.
And so many other brokers in US also implemented the same.
I think Indian regulators are very tough on such discounts and thats why no brokers giving discounts. One can say thats why Indian Financial System is stronger even when the sub-prime crisis/recession occurred in 2008 than other countries.
But one can think logically, in case of index futures one single index wont collapse in a single day, all other index also follow it, if its in the same market/country. Likewise WPI Crude Oil, Natural Gas and Heating Oil are all coming from a single raw material. Thats why they are giving discount and they also cut our positions automatically if one is running shortage of capital in extreme cases.
Recently Interactive Brokers started its operation in India, but so far they are not giving any discounts in Indian market. That may be becoz of strong regulations from Excange and SEBI.