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Will the Apple Stock Split (AAPL) Ruin it for Short Term Trading?

AppleThe announced 7 for 1 Apple stock split will change the price of an individual share from roughly $525 to something around $75.  More than wondering whether or not this is an opportune time to get into the stock long term, our equity traders are thinking that the stock might be significantly less attractive for short term trading.

Short term stock traders, like the ones at our firm, profit off of daily range.  Under this new price the % change on a daily basis in AAPL will represent only 1/7th the price range that it did before the split.  What was special about Apple was that it had a huge range and was still liquid enough to get a large amount of shares making it worthwhile to even the biggest traders.

The concern now is that the number of shares available will multiply by 7 making any large range price change harder.  Even with $30 billion of stock buyback the float in AAPL is going to significantly expand.  The expectation is that you would have to trade many more shares per position over a smaller price range in order to get similar outcomes.  For short term traders this is not ideal as it dramatically increases the percentage of trading costs relative to return.

We will have to see how it plays out.  If AAPL trades in a larger percent range than it did as a high priced stock then if may still remain of interest to short term stock traders.  The expectation is that with the increased number of shares that price change will be slower and more stable.  Maybe that’s what’s in play with this split.  This could be the start of AAPL maturing from a fast paced growth company into a slower stable, dividend paying, blue chip.  Time will tell.

Day Trading Trends in 2014 To Keep Your Eye On

day trading trends 2014The business of day trading is one that can shift in a microsecond.  Amazing day trading opportunities are a bolt from the blue, and trying to predict them up to a year in advance can sometimes seem a fool’s errand.

That said, markets are generally on an upward trend this year.  The housing market’s solidified, commodity prices are good, and as far as day trading trends go, everything tends to be trending upward.  So it’s generally a good year for people who want to turn around some quick cash.  Here’s a couple of events to look at in 2014 that will make or break some markets.

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What Is An IPO (Initial Public Offering)?

tower hill tradingCompanies fall into two broader classifications of Private and Public. The shares of a private company are closely held by a few share holders but shares of a public company are held by thousands of share holders. While a Privately held company need not disclose information about the company, a public company must disclose information about its activities and report to Securities and Exchange Commission (SEC). Public companies, desiring to expand, have the option of getting a loan from a bank or going for public offering by issue shares of their company. The first issue of shares by a company to the public is called Initial Public offering (IPO).
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Day Trading World Series

 

Day Trading World SeriesWe are proud to announce our first Tower Hill Trading World Series.  Starting next week we will be hosting a three week long day trading contest.  There will be 12 teams competing against each other to produce superior return on the purchase power that they are allocated by the firm.  Hitting certain profit levels within a day will be considered a hit, home run, or grand slam and teams will collectively post a score each day.

While this has little to do with baseball or the actual World Series, we always enjoy hosting contests to bring out the competitive nature of our traders.  This contest is for both in office and remote traders.  Hopefully the teams will help build the comradely amongst our traders.   Having a strong, close group is a big priority for us at THT and is the main reason that we hold these competitions.  It is also important to us that being a part of the Tower Hill Trading community is fun.  So let’s play ball, and may the best trades win!

Taking A Gamble on Day Trading

cards and dice for gamblingThe rush one gets from day-trading is similar, if not identical, to the rush felt by high-stakes gamblers.  Day trading is a high-risk, high-reward dynamic, and nowhere in the world of finance is the thrill of the hunt more keen.  But where does the risk and workload of day trading get you at the end of the day.  Let’s explore the difference between going it alone and joining one of the major proprietary trading firms. Continue reading

What to Know If You Are Thinking of Remote Trading

Remote Trading with Tower Hill Trading

One of the biggest decisions facing a starting trader is whether or not to trade remote.  In this day and age you find international remote traders partnering with firms and connecting to the markets from half way around the world.  I think there is a clear advantage in trading in an office surrounded by other traders, but technology is doing a great job of minimizing that.  People are managing to stay better connected regardless of where they live.  If you are considering going the remote trading route here are a few points to consider. Continue reading

Top Ten Rules for Trading at a Proprietary Trading Firm

Trading Success

Here is a list of timeless trading commandments at our Chicago proprietary trading firm to help you be a better trader. These rules are based off of an old list from Todd Harrison, Cramer’s old right-hand man and now head of Minyanville.com. We reconfigured them to pertain particularly to equity day trading. Tower Hill is one of the leading proprietary equity trading firms in Chicago and these rules have helped us get there. Continue reading