$10 Dow, $5 Dow match

[Freddie]

I currently am using Interactive Brokers to trade and am looking at moving into the Dow futures. I read that most brokers match your long and shorts for the $10 and $5 Dow futures so that you can buy say 1 $10 Dow future and then sell 2 $5 futures and you are even on all trades. From my correspondence with IB they don't allow this. What brokers are you aware of that allow this?

thx,

Fred

[torero]

Can I ask why anyone would do this? Staying flat has the same effect, except saves you commission costs.

[Freddie]

Maybe I did not explain myself. I enter long the $10 Dow future at say 12500. At 12600 I decide to take half profits so I sell one $5 Dow future. At 12650 my exit signal kicks in so I sell another $5 Dow future.

So I've bought 1 $10 dow future and sold 2 $5 dow futures. Interactive Brokers does not match them so that at the end of the day I've got 1 long $10 dow future and short 2 $5 dow futures. Some brokers balance them at the end of the day from what I've heard so that you would have no outstanding trades left.

I'm looking for a broker that matches these futures. I hope this better explains it.

thx,

[torero]

I see what you mean. Not sure who allows this. I'm not sure since I've never used this tactic before.

[notouch]

Why not just buy 2 $5 Dows to begin with?

[Freddie]

Just commission difference. Only 3 commissions versus 4. Not a big difference when starting out but can add up when you get to a few contracts.

thx,

[notouch]

I doubt the commission you pay on one $10 DOW contract is less than 2 $5 DOW contracts, unless perhaps you trade 100 contracts at a time.

[trader273]

Wouldn't the commissions for the $10 Dow be more then the ym, thus negating any savings? I think the $10 is the pit traded contract, but I could be wrong. I would check the commission schedule though. I know that the mini's are generally cheaper then the full counter-part ( eg take a look at the Euro-Fx (full contract vs the euro mini).

[torero]

It's possible the slippage will be bigger in big Dow due to lack of volume. Have you verify if there is slippage bigger than in smaller Dow, just a thought.

[notouch]

He's talking about the pit-traded contract where you have to phone through an order and eventually it gets to a pit broker. Barking up the wrong tree...