here's the explanation 1. Bend over 2. Grab your ankles 3. Enjoy the cornholing since you are not paper who can now hide block trades but as a trader you have to readjust how and what you trade based on mkt conditions a lot of people who quit the yield curve 2-3 years ago are back so we'll see how it all pans out. Bond is going to 1/2 ticks like ten year that's about it. It's all about CME competing with "other" exchange which will be run by Cash market people (cantor) who want to make bond like cash mkt we'll see I am sure there will be changes based on mkt feedback.
care to explain better? if i trade for 5 or 6 full point moves (not ticks) on ZB, how would this affect me?
well now those handles have 64 instead of 32 ticks should not affect you at all for your timeframe and profit/loss targets
DOM change isn't going to affect me. The reduction in tick size makes me want to take a rubber hose to whoever came up with the idea.
I asked Peter Barker, CME's Director of Interest Rate Products, and this is what he said about it... "The reduction in tick size is intended to make 5-year and 30-year futures contracts competitive with their cash market equivalents, where quarter and half 32nd tick increments have been the norm for years. In a world where traders generally compute their trading costs as width of B/A plus fees, the former has a great deal of influence over the economic viability of the product. We solicited the opinions of dozens of the biggest users on this issue, and though a few were against the change, the vast majority of users supported it." (Hopefully he doesn't mind me quoting him here) My concern about the combination of DOM and Tick change is posted here: http://www.elitetrader.com/vb/showthread.php?s=&threadid=116001&perpage=6&pagenumber=4
well I rolled all my 119 march calls amazingly I bought them at 119 almost 2 months ago, and sold them today at 119 25/32 (well futures were at that) I only lost 1 handle per option (bought 2 3/4 about, sold for about 1 3/4 per option) amazing they held their value so well. now im holding june 123 calls, at around 1 24/64 per call. and I reshorted futures today at about 120, (after covering em all earlier this week at 118) will short another 20 futures if we see 122.x Dunno why these treasuries are so high though, with inflation alarms going off, who is buying all this stuff?
http://stockcharts.com/charts/YieldCurve.html Animated yield curve since 2000, just press animate to run.
Out of my 10yr short at 117.01 unscathed. This thing is chopping far more than what I earlier thought. Im just glad I put on that short strangle as it seems to be fool proof as of now with march expiring in a few weeks. RBS came out friday and sold 25K 117 1/2 JUN CALLS at 131-130. YT
I think that no one really trusts equities right now since the spooz could go down to 1330 fast. People don't want to get caught short fixed income especially if another shoes drops (Ambac/MBIA) If we see some follow through in spooz to the upside richard_m might be able to scratch his position. Just kidding richard_m but we will see downside action in the yield curve when people regain trust in the indexes. People are keeping their money in treasuries until this rally is not seen as a bounce off the first bottom short covering in equities or a good area to get short again in the Spooz, the Rusty and the Nasty! There's my opinion but like a$$holes everyone's got one! GO GIANTS! FYI: trader lingo Spooz= S&P Rusty= Russell Nasty= Nasdaq