Day Trading

If you are trading stocks listed on the Big Board, then you have to note that the specialist can often take a few minutes from the opening bell before filling orders. If it is a NASDAQ-traded stock, then a market maker may take a minute, or it will execute automatically (though keep in mind that if your order is in before 9:20am Eastern, you are assured the opening price). Either way, you might as well let your order be for the first few minutes of trading. Further a specialist or market maker is NOT obligated to let you out of a pending cancel if the order is due a fill. It would be a courtesy only.

The only other issue is whether your order is actually even due a fill at all. If you are offering stock at $25.75, and someone else is offering $25.70, then you are not even due an execution until the stock at $25.70 has sold (as well as everything in between there and your order). Make sense? So you want to see where the stock is offered before fretting about your own fill.

If you are the offer, then you may need wait to see whether anyone wants to trade with you at the level you specify.

Hope this helps.

If you have a brokerage account at Wells Fargo then they have your information.

You are right, there 9 billion shares of Microsoft in the Planet but Wells Fargo only handles 0.01% of them with a regular $999 Dell Personal Computer.

If you have a brokerage account at Bank of America then they will have your private information and the same case applies.

There are thousands of banks all over the World and each one of them has a few thousands of Microsoft shares.

When you sell your Microsoft share to me Wells Fargo reduces the number of shares in your brokerage account from 1 to 0 and it only takes a nanosecond.

In contrast, the number of shares of Microsoft increases in my brokerage account from 0 to 1 and it only takes a nanosecond.

There is a middle man between Wells Fargo (Your bank) and Zecco (My broker)

In this case, the middle man is the NASDAQ.

The NASDAQ is a fully automated computer system. The tons of brokers instead of talking to the specialist just input their orders. The array of buy and sell orders form the bid/ask. When there's a match, the trade executes by computer.

IWM – iShares Russell 2000® Index
QQQQ – Nasdaq-100® Trust Shares
SMH – Semiconductors HOLDRs
GE – General Electric Co.
AMD – Advanced Micro Devices Inc.
MSFT – Microsoft Corp.
INTC – Intel Corp.
CAT – Caterpillar Inc.
WFMI – Whole Foods Market Inc.
TXN – Texas Instruments Inc.
A – Agilent Technologies Inc.
FLEX – Flextronics International Ltd.
SUNW – Sun Microsystems Inc.

Implied volatility (IV) does not usually change much during a typical day. Events which have a big impact on IV usually come out as press releases while the market is closed.

Without significant changes in IV or time until expiration, you will be unable to get much help from vega or theta in your trading. That means you will have to rely on delta, and possibly gamma, to make a profit.

Since the delta of an option is always less than the delta of an equivalent stock position, and the bid-ask spread is almost always greater for the options than for the stock, it takes a larger move in the stock price to break even using options instead of stock for day trading.

I am one of those who believes it is difficult to make a profit day trading stocks, and since it would be even more difficult to make a profit day trading options, I would not recommend day trading options to anyone.

I recognize the large percentage profits possible day trading options, but a large percentage of a small number is still a small number. That means to make a large profit you would need to risk a fairly large amount. I am not comfortable with that risk profile in my portfolio.

Ask yourself how much money you can get back if the stock market crash. This will help you NOT lose your $$ easily.

You may say me ULTRA conservative, but I view it is very important for any investors to invest their $$ responsibly.

Take a look on Google, this stock can lose 90% of its value if market is collasped. The cash per share is less than $37 without any debt. In the worst case(like wars and major economic disastous), the investors are willing pay $37/share.

You need to keep the powder dry, keep 20% in cash and 5% in QID(Nasdaq Ultra Short) or BEARX(bear fund) to protect your investments during sudden drop in equity market.

You only can trade 75% of total. Trust me, this will make you sleep very well during the night.