Again, I am not well versed in futures trading at this time. Logging into ThinkorswimI saw this message.
This was a very short delay, but my question is that I often see futures traders on C2 claim they have managed risk by having stop losses set on their futures trades and don’t hold when the market it closed for futures. If I was holding futures with stop losses at this time would I be able to sell or buy back my short on a different exchange? This may not affect the entire futures market and wasn’t very long, but to me it could be an example that using stops is not a sufficient protection against using 5-50 times leverage on your account since exchanges can be closed or halted for various reasons. Am I wrong? I would love to hear some expert opinions with some explanation.
No you wont be able to. Futures exchange products are patented to that particular exchange. For example, SP emini, is patented to CME and you can only buy/sell that product on that particular exchange. You can however, perform the offset on the SPY next day, yikes! (if CME were to remain closed.)
If you trade liquid products, such as ES mini, it’s rarely an issue, all my years with CME i’ve never seen it as an issue. However, if you trade illiquid products, such as lumber or eggs, yeah, it is quite nerve racking. Just stick to very liquid products and the gaps are never a big deal. (as long as you are not over leveraged)
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@Armenelos, different products have different opening and closing times which you should be aware of if you plan on trading or investing in it. You also CANNOT trade the futures product on another exchange since the product will only be available on that exchange unlike stocks which may trade on different exchanges.
I would advise on learning the risks before creating a strategy or subscribing to a strategy otherwise this could end up very badly for you or your subs by losing the entire account capital if you don’t know the risks of each product.
@AlgoSystems I 100% agree and have no intentions of starting a futures strategy before fully understanding it all. I am too hesitant at this time to even subscribe to one because trusting someone else to be out of the market when it is closed or to have stops seems a little to much of a ride for me if they have 5-50 times margin usage.
