How do the prices of derivatives relate to prices of their underlyings? (Page 2) - Beginners and Introductions | futures trading

Go Back

> Futures Trading, News, Charts and Platforms > Traders Hideout > Beginners and Introductions

How do the prices of derivatives relate to prices of their underlyings?
Started:May 5th, 2011 (09:07 PM) by dyross Views / Replies:1,785 / 11
Last Reply:May 6th, 2011 (03:35 PM) Attachments:0

Welcome to

Welcome, Guest!

This forum was established to help traders (especially futures traders) by openly sharing indicators, strategies, methods, trading journals and discussing the psychology of trading.

We are fundamentally different than most other trading forums:
  • We work extremely hard to keep things positive on our forums.
  • We do not tolerate rude behavior, trolling, or vendor advertising in posts.
  • We firmly believe in openness and encourage sharing. The holy grail is within you, it is not something tangible you can download.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community. It's free and simple, and we will never resell your private information.

-- Big Mike

Thread Tools Search this Thread

How do the prices of derivatives relate to prices of their underlyings?

Old May 6th, 2011, 02:06 PM   #11 (permalink)
Trading Apprentice
San Francisco
Futures Experience: Beginner
Platform: None yet
Favorite Futures: Guitar (lol, don't know yet)
dyross's Avatar
Posts: 12 since Apr 2011
Thanks: 2 given, 0 received

whatnext View Post
Can't prove anything regarding who had a clear advantage in potentially the most profitable day in trading history. Even if I did I wouldn't have the balls to post it - nor the big (but circumstantial) chunk of the puzzle I saw 10 days later. FWIW it's well known that not all venues of trade were subject to the same (unheard of ?) 30% max profit limitation.

It took a while to come out but Zero Hedge prove the flash crash was a result of quote stuffing (in my book at least).

What I incorrectly said caused it at the time was the high frequency trading algos going from buy to sell. 100's of thousands of HFT's are sent out every second. Almost all of them cancel out but the ones that don't break up big orders which pushes up the buy limit of the order. Not great if it's your order but great if you already owned the equity. If they go from buy to sell that would be reversed and the number of liquidity providing old fashion market makers has gone down a good amount.

Right, so how does that affect underlying stocks?

Reply With Quote

Old May 6th, 2011, 03:35 PM   #12 (permalink)
Elite Member
Rockland county , New York
Futures Experience: Intermediate
Platform: NT 7
Favorite Futures: CL, 6E, SI, ZC
whatnext's Avatar
Posts: 235 since Mar 2011
Thanks: 340 given, 78 received

Don't know if or how much each long/short of an ES contract pushes up or down the underling 500 companies of the S&P.

Quote stuffing disables the filling of new orders so only sells are filled (sells make a stock go down).

Not a 100% but think a reverse of HFT algos, from buy to sell, would push down the limits of buy price range and / or up the limits of shorting.

Reply With Quote

Reply > Futures Trading, News, Charts and Platforms > Traders Hideout > Beginners and Introductions > How do the prices of derivatives relate to prices of their underlyings?

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Upcoming Webinars and Events (4:30PM ET unless noted)

NinjaTrader 8: Programming Profitable Trading Edges w/Scott Hodson

Elite only

Anthony Drager: Executing on Intermarket Correlations & Order Flow, Part 2

Elite only

Adam Grimes: Five critically important keys to professional trading

Elite only

Machine Learning Concepts w/FIO member NJAMC

Elite only

MarketDelta Cloud Platform: Announcing new mobile features

Dec 1

NinjaTrader 8: Features and Enhancements

Dec 6

Similar Threads
Thread Thread Starter Forum Replies Last Post
ICE/NYBOT Prices help... MXASJ Commodities Futures Trading 15 February 11th, 2016 05:58 AM
Consumer Prices Rise on Higher Food, Energy Prices Quick Summary News and Current Events 0 May 13th, 2011 09:40 AM
If you REALLY want to know why gas prices are high.... RM99 Off-Topic 4 April 27th, 2011 05:58 PM
No Inflation? That's Not What Food Prices Are Saying in US Quick Summary News and Current Events 1 February 28th, 2011 07:33 PM
Bulk Monitors Best Prices c12345 Tech Support 10 August 4th, 2010 07:02 PM

All times are GMT -4. The time now is 12:02 AM.

Copyright © 2016 by All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts

Page generated 2016-10-26 in 0.06 seconds with 19 queries on phoenix via your IP