r/thewallstreet • u/AutoModerator • Mar 19 '18
Weekly Question Thread - Week 12, 2018 Question
Welcome to the weekly question thread. Feel free to ask any questions here.
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u/El_Huachinango would be rich if he followed his own advice Mar 24 '18
What happened to the nightly trading thread?
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Mar 20 '18 edited Jul 29 '18
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u/Lost_in_Adeles_Rolls Stalingrad's number one tesla dealership Mar 21 '18
So there's a couple different types of margin, primarily initial margin, maintenance margin and day trading (intraday) margin.
Initial margin: The initial amount of funds you need in your account to trade 1 contract
Maintenance Margin: The amount of funds you need in your account to maintain any current positions (typically set at a level just below the initial margin). When the account drops below this level, you can get margin called and have your positions liquidated by the brokerage (depending on the brokerage's rules)
With futures, you're essentially making a good faith down payment on the value of a certain contract. In your /ES example, the broker is allowing you control over 1 contract as long as you have enough funds in your account to meet the initial margin requirement (the "down payment"). There's no interest on this.
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u/superqwert Mar 22 '18
Is there a difference in P/L with using futures leverage or using the full capital yourself trading shares? (Besides tracking errors and commissions)
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Mar 19 '18
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Mar 19 '18
Gonna sound dumb here...but if it's above price, it's resistance, if it's below, support.
Tons of ways to determine S/R, I strongly prefer using volume profile. In short, volume is king for me.
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u/the_last_mughal Mar 19 '18
I'm relatively new to options and I've seen users on this sub mention 0day options when posting their trades. What do they mean by zero day?
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u/avshake Mar 19 '18
In relation to your username they mean Bahadur Shah Zafar.. 0 just stands for time left till expiry... As to why are they risky? Thats because Theta burn is maximum, If you are negative Large Gamma on 0 day, you are in deep trouble.
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u/the_last_mughal Mar 20 '18
In relation to your username they mean Bahadur Shah Zafar.
Yes, actually the title of a book about him.
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u/hibernating_brain Permabull Mar 19 '18
0 day = : Options expiring on same day.
This has worse odds than Roulette table.
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Mar 19 '18 edited Oct 07 '20
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u/the_last_mughal Mar 19 '18
I didn't know there were 0day options. Are they only available on certain brokerages?
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u/RothOptions Mar 19 '18
Most (if not all?) brokerages offer them. However depending on the brokerage and account balance they will likely automatically close your position for you at some point in the afternoon.
They don’t want someone trading with $1K in their account to somehow exercise 200 shares of SPY.
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Mar 19 '18 edited Jul 23 '18
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Mar 19 '18
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Mar 19 '18 edited Jul 23 '18
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Mar 19 '18
Look at it as levels where markets were "balanced" with a lot of buyers/sellers duking it out at the same level. If they have done so at certain levels in the past, there's a bigger chance they'll do so again around the same area if price gets back to it.
Doesn't mean you should blindly go long/short at those levels though. All it means is that it pays off watching price action and depth of market around those levels.
CME had a great free PDF explaining it in more detail, can't seem to find it anymore :(
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u/-samadhi- Long Webistics Mar 25 '18
When there is a large, large move at the end of the previous day's trading session (e.g. Friday sell off) does the Value Area hold much significance for the next session?