There are some major differences between trading HSX's CX Derivatives and MovieStocks that will add a new dynamic dimension to your trading experience. Here are a couple of suggested strategies for trading CX Derivatives:
Short Selling: short sellers will likely do well with CX Derivatives.
While short selling is possible with MovieStocks, one of our goals in creating CX Derivatives is to help traders become even more comfortable with the concept. In CX Derivatives trading, just like in real money futures markets, short selling is a permitted and necessary part of the market. So, if the CX Derivative price looks too high, then, go ahead, short that Derivative!
Arbitrage Trading: remember that CX Derivatives and MovieStocks will always have the same DELIST price.
If you buy 10,000 shares of a MovieStock and sell 10,000 of that film's CX Derivative for a higher price and hold both positions until DELIST, then you'll have a guaranteed profit. However, be sure to remember to take into account the commissions costs of your trades!
No-Adjust Trading: CX Derivatives have no ADJUST, so be careful on opening weekends.
Yes, the early bird will often make enormous profits. However, with CX Derivatives the market may become over extended very quickly. You don't want to be caught holding a high priced long position at the time DELIST occurs. So, if you see over extended prices and quick profit opportunities, grab them!
Momentum Trading: The Virtual Specialist (VS) market maker is very sensitive to order flow and will aggressively move its prices up and down.
If prices look out of line and you're making a quick profit, don't be fooled, you might want to take that profit before someone else starts shorting!
Enhanced Monitoring and Compliance: CX Derivatives are being used to test a new set of Cantor Exchange real money tools designed to detect trading abuses.
Of course we know that HSX traders would never try to do anything unfair, but all traders should know that we're being extra vigilant with CX Derivatives.
The HSX Team