No problem I know those numbers sound unreal, especially if you are used to today's markets. But it were different times, and Paul was the biggest trader on Eurex back then.
25,000 RT a day means roughly 6,000,000 RT a year. So he made 1,000,000 gbp in 6,000,000 RT or average 0.16gbp per RT. To me this has nothing to do with trading. Trading means knowing where the market will go and hold your position for real profits, not cents. A real trader is someone who can make money with an average holding time of at least 15 minutes. All the rest I put under gambling. http://www.rotterinvest.com/
True, makes a big difference for example if you pay 3 EUR per roundturn in Bund and Bobl or if you pay 0.70 EUR. With 3 EUR per roundturn it is/ was impossible to scalp in the Bund/Bobl/Schatz fly, but if you pay less then 1 EUR it starts to make sense.
absolutely. once you RT costs are down below 15% of the tick size new strategies are open to you. flys will then cost you 60% of a tick enabling you to profit. The trader also needs to allow for losers and scratches, hence top volume traders will be paying way less then 10% of a tick per round turn. If they can net out 10% of a tick per trade on big volume you can make a lot of green.
I dont trade Eurex but if someone could post up a DOM of the Schatz/Bobl spread it would illustrate the liquidty of some of these markets.
Mtrader, it depends on your definition and preference of and for trading. You are a trader that wants to know and maybe knows where the market will move within the next at least 15 minutes. Me for example, I have no clue where the market will move, but I enjoy fast scalping, position myself on both sides of the inside market and take advantage of high trading activity and capture the spread. If I hold longer than a few seconds, my trades turn into gambling. So I believe there is not that ONE real trader. There are just different types of traders. Making just a fraction of a tick on average was/ is not unusual for pit traders and scalpers. This is exactly what Paul Rotter, Tom Baldwin, Harris Brumfield and many others did. And many traders still do it. And there are traders that prefer to hold longer, to trade smaller size but go for larger moves. And the good thing is, we both need each other. You need the fast traders, the short term scalpers, the traders that provide liquidity, so you can get in and out of your position trades without problems and without much slippage. And the scalpers need the larger traders, the speculators, the orderflow, because thats what brings volume, movement and volatility to the markets. So I believe we all need each other to make the market a market. And if we are honest, the more players join the game, the better. You can only win what others are losing. The more come to the table and play, the more opportunity there is. So we should embrace any new player, no matter what his trading style is, and welcome him to our table
These are all retail fees... if you would be a hedgefund/MM etc with your own deals with clearing etc you're looking at 10 cents cost per trade...
Wrong, Eurex exchange fee for Bund/Bobl/Schatz is still 0.20 EUR per contract, no matter if you are exchange member or not. So you will still have to pay 0.40 EUR per roundturn and of course you have additional cost per RT, even if you run a company with large trading volume. I think you could get down to as low as 0.50 EUR per roundturn, but getting lower will be pretty tough.
The top volume players pay less than the publicised membership exchange fees on some exchanges. I dont know about eurex. In some instances on challenger exchanges they are paid to trade.
propwarrior, for illustration I just made a picture of a Eurex calendar spread (FESX, september-december). Pretty thick market, lol