IMPORTANT: This module is powered by eSignal datafeed. To use it, you must also obtain datafeeds for the following:
- CME minis: SP 500, NQ 100, YM
- S&P 500 cash index
You need to send us your esignal USERNAME to activate it.
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Program Trading
With our Program Tradining software, the 'average' guy can now be along side the big institutional traders. Program Trading is a big part of the daily volume and you can now know when these programs are likely to initiate. Then when you 'See-The-Move' in Autopro, you can go with it.
Just get a copy of Barron's magazine to see the percentage numbers.
Program Trading accounts for up to 45% of the NYSE trading volume each and every day!
The media and CNBC talk about the 'Fair Value' and 'Premium' all the time. When the premium gets too away from the day's Fair Value, program trades are likely to kick in to normalize the market conditions.
Even if you are trading the TF or MC, it is usefull to have the Program Trader up and running. This is because many of the stocks in the S&P 500, Nasdaq, and DJI are overlapped in the MC and TF indices. Another reason is that the futures contracts are in general moving and reacting in the same directions and to the same market stimuli.
Fair Value
This is a theoretical value based on a mathematical formula. The value changes each day based on the fact that futures contracts are decaying toward their expiration date. As such, the Program Trade threshold values change every day. As the premium moves away from FV in either direction, it is like a stretched rubber band.
The actual formula is: FV = S[1 + (i - D)]
Premium
This is the difference between the current index futures contract price minus the actual index cash price.
When the premium rises to a certain level away from Fair Value, 'BUY' programs kick in, which means that the large institutions are buying stocks in that particular index and selling the corresponding futures contract.
When the premium falls to a certin level away from Fair Value, 'SELL' programs kick in, which means that the large institutions are selling stocks in that particular index and buying the corresponding futures contract.
In our software, when you see 'Buy' or 'Sell' in the labels, those are for the Futures contracts, not the actual stocks in the cash index. A buy or sell signal does not guarantee a futures move in that direction. The signal is another tool in the trader's arsenal to use during the day.
Program Trading Module
Just click your desktop icon and the software will automatically start and load the current day's Program Trade values! It will begin to function after 5 seconds.
Once the software is running, you can click the menu item: Minimize
Then if a PT level is breached, the software will automatically restore to your desktop along with audio alerts.
Whenever a PT threshold is breached, that box will turn color so you will know what the breach was. The latest Program Trades are printed in the upper text boxes. The entire list of the day's program trades are stored in a window and can be seen by clicking the menu item: View Signals
Initial Startup Window
The first window that comes up is where you need to manually 'fix' any values that may have a character that is not numerical. The PT module goes to a special website and gathers these threshold values, and sometimes their web programming changes a little.
In this window shown here, you can see the '<' in the Sell 2 DJI. Just remove it with your backspace key and then click the, 'Close, Save Changes' button. Your non numerical characters may be different and appear in other levels.
Program Trade Levels
A '1' level is the minimum threshold level for program trades to start initiating.
A '2' level is where program trades should be predominating.
Menu Options
Click 'Options' to see your options
Under 'Audio Alerts' you can select the sound that will occur IF any PT threshold is breached. Then you can select the frequency to here this sound. Choices are every 5 or 15 seconds.
Click 'PT Levels Refresh' to 'Refresh' the PT numbers. Only do this if 1 or more of the PT level boxes are blank on software load. If the conditions persists, contact the vendor.
Click 'Minimize' to minimize the software. If a PT occurs, the window will restore and audio alerts will occur.
Click 'View Signals' to open the window containing the list of the day's program trades. In this window you can click the 'Write to File' button to save the list contents to a file on your desktop.
Click 'Calendar' to view the week's economic calendar.