I just wanted to share with all interest rate futures traders a recent unpleasant experience i've had with these terribly organized un tradable electronic markets. what happened here is an absolute disaster. i went long a June bond at 111-10 on April 5th. i placed an order the next day to put a stop loss to sell a June bond at 110-01 on a stop. i was stopped out the very next day on April 6th at 110-00. however, i noticed that the market never even got near this price. the low for the June bonds on April 6th was way above that price at 110-07. the order i placed was a day order and furthermore the markets were open for less than an hour that day because it was good friday. so you ask how in the hell can this happen? i called my broker to complain and found out to my complete surprise that the "electronic" session of the bonds actually hit 110-00 on April 6th which was down way more than a full handle in an abbreviated trading session. while the pit session version of the bonds more normally hit 110-07 at its low. it seems that unbelievably there can be as much as a 7 point spread in the same exact market. how in the world can i trade a market that has a bigger intraday spread in price than even in the e-mini futures do to their larger pit session traded commodities such as the big dow to mini dow and the big s&p to the mini s&p? and those are 2 different markets mimicking one another. the most you will see a few ticks in difference because of arbitrage. a 7 point spread in the bonds is equivalent to a 26 point spread between the big and emini dow. you never see a 7 point intraday spread even though these are 2 different markets. with the US & ZB(electronic version) they are the same markets. there should be no reason that the electronic market should move 7 points below the pit session market. how will i ever be able to trade this market besides the fact because of this incompetence i lost almost 1400 dollars because of this nonsense. i should have still been long this trade and i would be profitable right now. to have a 7 point spread between pit and electronic session in the same exact market is unacceptable and hard to imagine. this electronic session is absolute garbage. this is a total scam. that price shot down there for one reason and that was to trigger stops and make money and to scam traders. especially for a trading session that was only open for less than an hour. i can honestely say this since i have been trading bond futures for years before these wretched electrnic markets and whoever is running them started. i have never seen such a spread within the same market itself. it makes no sense. this is an outrage. even my broker was surprised that there should be such a wide spread within the same market. i even sent the cbot a nasty email and will call them as well. this is horrible. all this money lost over their crookedness. i just thought i might share this with you and if you wish you can share your thoughts and experiences about this. addtionally, i would appreciate if all you bond traders would notify the CBOT and complain about this dishonest highway robbery. thanks. Sincerely, triggertrader.
You are a complete tool. Did you even know that the unemployment report was coming out that day? Do you know that about 95% of the volume is electronic and the floor is there for a background for Rick Santelli?
All brokers are crooks -- everyone knows that. Please don't post obvious facts as if they were news. Next you'll be announcing the sky is blue..... As a note differences between the pits and the screen occur all the time and are normal -- they're the result of differences in liquidity. Chalk it up to a learning experience and move on.....but remember the pits exist to take your money!
Everyone does't know it. I didn't know it. It is not obvious facts. This is very good information and I want to thank him for posting. Not everybody is aware that some brokers are dishonest. Especially new traders who are unfamiliar with the stock market. So it was nice that he posted this for all of us.
I was about to say the same thing. Anyone trading into an unemployment number, ESPECIALLY during a holiday session has no beef at all with CBOT on slippage. The mkt is normally thin and volatile during the report....throw in a holiday and you are asking for trouble. THis guy has zero ground to stand on....is actually embarassing that he is whining about it.
Had he WATCHED the Pit and Electronic markets for any length of time he would see this disparity. I see it all the time in grains. The pit might be 2 pts above the electronic at any given time. I only chart and watch the Electronic as I dont pit trade... Thats total bafoonery....And yes the bond spiked as low as 110 that day....before close according to my DTN historical Data...
Has ZERO to do with any broker. The guy got filled at a legit price that traded during the most voaltile 2 minutes of bond trading each month. The reason the price difference was that extreme was it was a holiday session with less than normal volume ....eqauls more volatility.
Why is CBOT a crook? Why are brokers crooks? Neither of them did anything wrong here. CBOT simply provided a means for people to trade. What they traded and at what prices is up to them! Brokers had nothing to do with this scenario at all. When 86,000 bond futures were unleashed within a few minutes of the jobs report, there was slippage between the electronic and pit contracts. This is an opportunity that no one is going to pass up. The worst you could argue is that the pit is too slow to have allowed someone to take advantage of the risk free arbitrage between pit and screen. So there was free money between electronic and pit bonds for a time. Why is this a problem? This is equivalent to complaining that a cash index went up a full point, but the futures only went up a half point. This is the nature of derivatives!
Had he WATCHED the Pit and Electronic markets for any length of time he would see this disparity. I see it all the time in grains. The pit might be 2 pts above the electronic at any given time. I only chart and watch the Electronic as I dont pit trade... Thats total bafoonery....And yes the bond spiked as low as 110 that day....before 8:30am according to my DTN historical Data...