One in the pit, the other on the screen (either "upstairs" or even by the pit,) they are wired to each other by headphones. They then buy one and sell the other in the right ratios to make the mispriced spread (e.g, 1 big spoo, 5 eminis.) Some even do this across exchanges in the chicago pits... These people that are using stochastics, MACD, and the rest of these crap to make trades don't realize that they provide the fodder to these guys and that a huge portion of traders volume is taking trades that are nearly risk free. The key is lightning fast executions, a quick mind, and most of all, DIRT CHEAP commissions. nitro
Eurex on horizon: high noon for US futures marts? Sun August 10, 2003 01:10 PM ET By Ros Krasny CHICAGO, Aug 10 (Reuters) - U.S. futures exchange officials are looking forward with a mixture of fascination and dread to next year's entry of Swiss-German Eurex, the world's largest derivatives exchange, into the American market. "It's a lot like that old Gary Cooper movie 'High Noon'," said an official with one U.S. exchange. "We're just waiting for the outlaws to ride into town on the noon train." Eurex's urbane crew are far from western-style gunslingers, but players in the U.S. futures industry are anxious to learn how their European counterparts are planning a showdown. Some answers could come next month. Eurex spokesman Uwe Velten in Frankfurt would not discuss the exchange's strategy but said it expected to file its plans with the Commodity Futures Trading Commission, the U.S. futures regulator, by the end of September. But before that, the Swiss Futures and Options Association conference in Burgenstock, Switzerland, a high-profile industry gathering scheduled for Sept. 4-7, is seen as a possible venue for an announcement. One commonly held view is that Eurex will turn the U.S. futures industry upside down. Its model of low-cost electronic trading has been a winner in Europe and would pose a direct threat to the survival of Chicago's storied open-outcry trading floors. The Chicago Board of Trade, the No. 2 U.S. futures exchange, opened the door for Eurex in January when it said it would drop the trading platform it operates jointly with Eurex, known as a/c/e, at the end of this year. Eurex immediately shot back with plans for its own exchange, and it is expected to use a/c/e to take aim at its old partner's biggest products, U.S. Treasury futures. Partnering with an existing exchange, or buying one outright, may be the fastest route to a regulatory green light for a foreign exchange breaking new ground in the United States. "Buying a player that already has exchange status could be quickest, considering their intention to enter the market early next year," said Sang Lee, manager of securities investment for Celent Communications in Boston. But Steven Manaster, dean of the Leeds School of Business at the University of Colorado, said if Eurex can deliver "safety and soundness" to the CFTC's satisfaction it might opt to build from scratch. "This may be more of a turf battle and a market share battle than an issue of safety and soundness," said Manaster, a two-time former chief economist with the CFTC. Officials at several member firms of BrokerTec Futures Exchange of Jersey City, New Jersey, are convinced that Eurex plans to buy the struggling exchange. "It seems to be just about terms and money at this point," said the top official at one of BFE's 30 member firms. Hank Mlynarski, president of BrokerTec Futures Exchange, declined to comment, as did Eurex's Velten. A Eurex deal with BFE seems a good fit given BrokerTec's inability to gain market share in Treasury futures and the close ties of both exchanges to investment bank Goldman Sachs. Former BrokerTec board member Michael McErlean quit as global co-head of futures at Goldman Sachs in London to lead Eurex's U.S. operation. At the bank, he was once a colleague of Rudolf Ferscha, Eurex's ambitious chief executive officer. Through BrokerTec Clearing Co., BFE outsources processing services to the Board of Trade Clearing Corp., which will also be Eurex's U.S. clearing partner. BrokerTec Futures Exchange opened in 2001 to trade U.S. Treasury contracts similar to those at the CBOT. Despite the backing of many of Wall Street's biggest firms it has barely dented CBOT's dominant market share. For Eurex, CBOT contracts would complement German Bunds, the world's busiest futures contract, and other European interest rate futures such as Bobls, German five-year notes. "Could Eurex offer an advantage in cross-margining U.S. Treasury futures against Bunds and Bobls? One would think Eurex would gain an advantage there," one CBOT member said. CBOT'S FLANKS EXPOSED? Industry analysts expect Eurex's approach in the United States to be modeled on the success of its predecessor, Deutsche Terminboerse, in shifting trading in Bund futures to Germany from London's LIFFE exchange in 1998. DTB's electronic platform, cheaper and more efficient than LIFFE's trading floor, scored a decisive victory. Regardless of the merits of one trading platform over another, dropping the incumbent system was risky for the CBOT, one trading firm executive said. "Companies have spent tens of millions of dollars writing gateways and network connectivity and setting up servers to interface with the current platform," he said. Some 80 percent of CBOT financial futures turnover is now done via a/c/e. http://www.eurexchange.com/index.html
hours , or includes all overnight and post trading periods ? <Some 80 percent of CBOT financial futures turnover is now done via a/c/e. >
How much equity per contract do you allow to swingtrade or daytrade the TBonds? How large an account do you need (minimum)? ZB and ZN seem more predictable than ES and NQ but the contract and tick size are so big...
that trendline after hours ... of course the retail sales numbers could change everything when they come out
Put 2k in an IB account, you can trade ZN or ZB intraday for about 800/contract -- you'd have to be right on your very first trade tho (and very very frequently thereafter, if you plan to stay on that kind of leverage)
10K per contract for 30 year Bond. 5K per contract for 10year Note 10year note tick is 15.62 and less then 2,000 initial margin, pretty much same as emini .
that's right the 10 year trades in 64th, does the spread always stay one tick tight? The five has a spread of 2-3 ticks.
I agree with Walter about capital, at least 10K for Bonds and 5K for Notes. Don't be deceived by the low margin requirements, the leverage cuts both ways and can cut very deep if on the wrong side! The spread is usually pretty tight (one tick) unless when it is moving fast that the bids/asks will disappear faster than many traders are able to react and it can go far and beyond in the other direction! Also I would not trade them without a solid plan, strategy and discipline! IMO