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I don't know what's wrong with AMP's numbers on their all-in calculator. It is wrong. Here are the actual commissions (from my statements, calculated carefully for my spreadsheets):
$2.67 R/T with the standard tier
$2.17 R/T with the higher account tier (the $0.50 R/T commission is waived)
There are different ways to measure "cost of commission" -- one for me is "commission as a percentage of the value of a tick." For mini HSI it is quite high -- 168%. That is, you need to make 1.68 ticks on a trade to break even. However, considering the larger ranges of HSI, perhaps this is forgivable.
Understand the components of an all-in commission (per side):
However, if trading the big HSI contract, all of the above are the same, except for the exchange cost, which is 10.54 HKD. So, you pay the exchange $1.36 per side for HSI, versus $0.46 per side for exchange on Mini HSI, but all other costs including clearing stays the same, for a total of $1.98 per side ($3.96 R/T) on the big contract versus $2.17 R/T on the mini. This gives a 61% on the metric for the regular HSI contract (as it is worth 5x). Not cheap, but certainly makes the per-trade cost of doing business a lot more doable.
I really appreciate the break down. Definitely raised my eyebrows when I saw the R/T be more expensive then tick value... that was the first thing I noticed and the reason I asked here to see if I'm calculating this all correctly. thanks again!
I suppose, like you said, the daily range and movement of this instrument can make up for it.
Would you suggest I pick up the exchange data ($10) then SIM it so I can get a better feel for how this operates? I can only locate delayed data that doesn't have any market depth.
If you plan to trade it, then of course. When you take your first couple of trades, HSI will snatch away $10 before you can blink, so I wouldn't sweat it
I was mistaken on the $10 for HKFE. An email I got back from my broker had wording that made it sound like it was $10.. but they were quoting me the $10HKD HSI per side exchange fee involved when I was only asking about MHI.
I can agree that looking at the daily range is an appropriate way to compare r/t costs. I'm glad that I was able to get confirmation from both @josh and @Todd4 about costs.
When reading back over my email I got from my broker they weren't calculating the fact the exchange fees are in HKD and not USD, thus quoting me something absurd that made no sense to touch this market.
Example:
Commissions: .15
AMP Clearing: .35 CQG routing: .25 NFA: .02
MHI fee: 3.50
Total: $4.27 per side or $8.54 round turn
Sometimes I'll post this type of analysis/idea in the spoos thread, but it doesn't really apply there. Let me know if I should start a new thread for this, I'll be happy to, instead of cluttering here.
There's a general risk on tone in Asia tonight, equities across the board are relatively bid. Big down day on Friday in HSI. Shorts got caught early Monday and both profit taking and short covering drove the market higher. Today HSI opens on a gap (a true gap, as there was no afternoon trading in HSI).
To define some kind of line/structure, have a look at the poorly auctioned area from Friday, from about 23050 to 23300 (yellow rectangle in chart). To put it another way, there was relative balance above 23300 on Friday, and below 23050, though obviously the market was weak. But the 23050 to 23300 area was blown through quickly.
On a gap up, what would happen? Would we say within the yellow shaded area and 're-auction' it? So far, a pretty decisive move north of 23300 has held the market above that level and has generally been bid. So, this is one way to frame the structure of the market. You can see buyers generally grabbing HSI below 23300, and can act accordingly. Failure to hold the 23300 and building value below would set a reasonable downside target for exploration of around 23000.
Please continue, great to read your thoughts and perspective on the Asian markets. Hope to gain some more time back for trading and join in on your analysis with some KOSPI200.
The HSI is having issues going anywhere the past few days, given the shaky state of political affairs -- of course, that doesn't prevent an algo-induced 300 point rip in the first 5 minutes... but otherwise, HSI is severely depressed, in relation to other indices:
Meanwhile, Nikkei is squeezing higher, massively outperforming HSI:
Mean value since the March 19 low has finally caught up with the mode, and both are right around 19250 - we are currently trading 2500 points (13%+) above that measure of value, and are quite far above the +1SD from both of those as well:
A little bit here and there, but have not been as active as I have during the US day session.. 12% grind up in 8 trading days and 42% higher since the march lows (almost as good as NDX's 46% rally!). Wild stuff... the market does what is least expected... consistently!
