Hi Skenobi, Jacob and the other (ex-)institutional guys tracking this thread. Thank you very much for your answers and insights so far, it's all very interesting and generous of you. I've read the first few pages and haven't found the answers to my specific questions yet, so I hope I'm not repeating anything. If anyone thinks these questions have been asked before, please let me know and I'll dig some more
By the way, my questions relate to futures (especially indexes) as well as spot FX. So, here goes:
1. Is it true that separate (non-affiliated) institutions "work together" sometimes in order to send price their way? In other words, their main source of profit is from retail traders and big players who aren't "in the know"?
Or are the big institutions mainly trying to outsmart and make money from each other?
2. Within one institution, are there separate teams of both long-term traders AND short-term (intraday) traders? If so, do they trade the same instruments? And are the short-term traders restricted by the plans of the long-term traders, or are they pretty much given free-rein?
3. In your opinion, are false breakouts usually initiated by an institution that's trying to send price the other way, and trick traders into opening wrong positions (or get stopped out of existing ones) so that the institutional traders can take the other side?
Or are they usually caused by a misunderstanding, or a fight, between institutions with different agendas?
4. Regarding stock index futures, do institutions generally buy and sell the actual stock and arb the futures, or is it the other way around?
Sorry for all these questions, and thank you in advance for considering them.
Best wishes,
NT
By the way, my questions relate to futures (especially indexes) as well as spot FX. So, here goes:
1. Is it true that separate (non-affiliated) institutions "work together" sometimes in order to send price their way? In other words, their main source of profit is from retail traders and big players who aren't "in the know"?
Or are the big institutions mainly trying to outsmart and make money from each other?
2. Within one institution, are there separate teams of both long-term traders AND short-term (intraday) traders? If so, do they trade the same instruments? And are the short-term traders restricted by the plans of the long-term traders, or are they pretty much given free-rein?
3. In your opinion, are false breakouts usually initiated by an institution that's trying to send price the other way, and trick traders into opening wrong positions (or get stopped out of existing ones) so that the institutional traders can take the other side?
Or are they usually caused by a misunderstanding, or a fight, between institutions with different agendas?
4. Regarding stock index futures, do institutions generally buy and sell the actual stock and arb the futures, or is it the other way around?
Sorry for all these questions, and thank you in advance for considering them.
Best wishes,
NT
You reap what you sow.