For sure. Eurex will do quite well despite the moaning and groaning of the CBOT. Chicago had years to put in an efficient platform. They never did. Life Connect is good, but they don't use it. It is too bad. The CBOT might be relegated to trading only the grains. The exchange is too good for that, but they just did not "get it."
Can someone explain how trading Eurex will be different than on CBOT for someone like me. For the record, I may trade 3 times a day, I may not trade at all. I might trade anywhere from 1 to 10 contracts at a time. A couple of ticks one way or the other doesn't effect me. What is the real advantage then to Eurex?
Assuming a couple of ticks don't matter to you, then you could trade at any exchange and with any broker... Then again, you might want to save a few bucks, if this can be done for free. I don't expect much price difference at the Eurex, as this will be arbed out. But, you will find Eurex will have cheaper exchange rates, which should lower your transaction costs by ~10-25 cents per contract. Just the arrival of Eurex has already caused the CBOT to lower their exchange fees from 90 cents to 30 cents per contract, a very nice savings for active non-member traders. Personally, I will move my bond and note futures trading to Eurex as soon as possible, as I would like to reward the exchange that offers the lowest, most efficient pricing for my business. The CBOT has proven that they will keep their pricing at a maximum until the very last moment possible, and is reducing their costs now only in a wishful attempt to save their market from going to the Eurex. Goodbye, CBOT! Screw your clients and it will come back to haunt you in the end. -Eric
Thanks Eric, Two comments: Low price is great but what about service. I don't know if it's true, but I've heard nothing but horror stories about the way that Eurex distributes data. Other biggie is the CBOT has LDB data. For anyone that knows the right way to use it, it's priceless. I am all for competition and choice in the market place, so long as it doesn't screw up the ability to trade effectively (for instance having 2 contracts neither of which are very liquid by itself instead of one central market place). Will be interesting to see what happens though.
Yep, that would be horrible. I really hope that having the products listed on two exchanges does not screw up the liquidity or the way these products trade. But, I'm all for lower fees. I also like the realtime Liffe platform that the CBOT has now much better than the netting that the Eurex had.
1. Stop Orders: NO (CBoT) vs. YES (Eurex US) 2. Ticksize for T-Bonds: 1/32 (CBoT) vs. 1/64 (Eurex US)