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Tag Archive | "execution"

Edge, Execution, Allocation: Pieces of the Trading Puzzle

Tuesday, December 30, 2008

We spend a fair amount of time on this blog looking for trading systems that have some discernible and consistent edge over the market averages. And edge is important: if you don’t know where your profits will come from, you certainly shouldn’t expect to have any. But an empirically demonstrable edge is just one of the three components that comprise any good trading system. The other two, execution and allocation, are also essential to the success of any trading…

Commissions for Option Spread Traders

Thursday, December 4, 2008

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Commissions are a cost of doing business, and as such shouldn’t be ignored. It’s worth the trouble to spend a few minutes checking that your commission structure matches with your trading style, and that you’re getting the best rates available. But paying too much attention to commissions can be a double-edged sword: there’s a certain type of trader we hear from pretty regularly, the sort who obsesses about commissions, 60/40 tax treatment, exchange fees, etc., such that they seem to…