Trading: FAQ

• Bid/Ask discussion
• Fairvalue level
• Regional settings
• Snap quote

Bid/Ask discussion

Here is a useful e-mail on the Bid/Ask discussion I am including for the benefit of all.

"As you know we only trade S&P's.  And have since 1982.  The bid and offer (if broadcast at all) is irrelevant.  And a lot of the time the last trade, which is what we all plot, is away from the actual market too.

The only time I "see" the bid and offer is when our people on the floor answer the phone in the pit, as in "70-Even".  They do not say "hello".  That was a quote a while ago meaning 1285.70 bid and 1286.00 ask.  And usually it is somewhat close to the actual market, no matter what the last trade was.

I just checked again for you at 11:35:40 and our trader answered the phone "50-80" i.e. 1285.50 bid and 1285.80 asked.  I hope this information is helpful for you."

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From HL Camp & Company:  " Our FairValue is representative of our costs.  Other firms are a little higher or a little lower depending on their costs.  The main component of a firm's cost is the rate of interest paid to their bank to borrow the money to buy stocks.  So, unless a firm is using a VISA, most firm's fair value is pretty much the same.

Buy/Sell execution levels on the PREM (premium, spread, basis) are a completely different deal.  All of the execution levels given in the media, like on CNBC and FWN or distributed by BMI are "theoretical" levels.  In theory, these levels are the exact price where index arbitrage would make a profit.  Great theory, but in the real world these levels never work.  Why?  Because the most important ingredient in index arbitrage and the one thing that we are most concerned about is not even in the fair value (and therefore the execution level) formula!  The college professors left it out of the "theoretical" values.

Since most traders are a skeptical bunch, don't take our word for it.  Just set your price alerts on the PREM at the theoretical levels given in the media every day and watch what happens to the Dow (indu) or other cash indexes (spx, spy, oex, syx) whenever those levels are hit.  The answer.... nothing.

Then set your price alerts at our "real" levels and watch what happens to those indexes about 6 minutes after you hear a beep.  The answer..... program trading.  Why?   Because "theoretical levels" are for college professors and their students and media discussions.  Our levels are for program trading.  And the largest firms on the street like Banc National de Paris, and Susquehanna use our levels.

At first glance our levels may seem to be "extremely high and low" compared to other levels in the media.  But in the real world of trading, our levels are just fine for us.  We give them to the general public every day for free at http://www.programtrading.com/buysell.htm.

The levels that we publish every day are the actual levels that we and our clients will use to execute buy and sell programs on that day.

We hope this additional information about fair value and buy sell execution levels is helpful for Ensign users.  And if your are wondering what the missing ingredient is, that is not included in the media numbers, and the one thing that is the most important element in program trading, then send us some email to info@programtrading.com and we will give you an explanation promptly."

HL Camp & Company
Program Trading Partners
Grand Cayman, Palm Beach, St. Martin

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Regional settings affect the price display in our Trade Accounts. Go to Windows and change the Regional money settings.   Click Start Button | Settings | Control Panel | Regional Settings.   On the form here is how my Currency parameters are set.  Pay attention to the decimal symbol entry is a period.

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The Snap Quote feature is used to quickly find a quote for any symbol.  Snap Quotes eliminate the need to browse through quote pages and market groups to find a symbol.  This feature is particularly useful for Brokers who look-up many quotes for customers during the day.

To request a Snap Quote press the  F12  function key on the keyboard.  An entry window will prompt for a symbol.  Type in a symbol and then press  Enter.  The Snap Quote window will then appear containing all the price data.  The window borders can be resized both horizontally and vertically to display just the left column, or just the  Last  price if desired.  Double-click anywhere on the Snap Quote window to open a Chart for the symbol.  The default double-click chart time will be used when opening the chart.  Click the  New Symbol  button to request a Snap Quote for a different symbol.

Snap Quote windows can be opened from a Chart by selecting  Chart | Snap Quote  from the menu.  Snap Quote windows can be opened from a Quote page by clicking the  Quote  button on the quotes button bar, or selecting  Quotes | Snap Quote  from the menu.  Several snap quote windows can be opened at the same time if desired.

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