I just sent an e-mail to CME asking about if they have market makers or actively arbitrage between spot and the futures. It'll be interesting to hear what they say...
I was just reading the New Market Wizards interviews last night, and it was a somewhat good read - especially on FX and currency futures which interested me mainly. It seems it was much easier in the more inefficient markets back then, so I don't know how much credence we should put into their stories applies to markets today. I will certainly be interested in info from someone who makes it very big today, as I gather that is much more hard work. Seems like, market makers or not, the currency pits were a place of peace and calm in the beginning and a lot of naïve opinions and traders. I think that there are players making the currency futures look like market making anyways - esp. with regards to CME members benefits and the lines of credit they get. edit: 4 and 2 pips profits on 2 trades where I bought below 1.229-level on EuroFx. I am not able to "keep sitting" in this market, and although I use a lot of leverage I at least scale in like some other successful traders say they do. Scaling out is something I do not do so well, but I can't be in a trade all the time and don't have quote-screens all over the place like Lipschutz. I of course recognize that the big profits are in taking the long trends, but I am not that good (yet?) and therefore prefer my smaller profits - although I make much more money now than any time I was working. I am creeping up on doubling my trading-balance, so that will be a little milestone.
I agree about the players almost like market makers. Even during the odd hours, there are individual bids/asks with > 100. CME replied really fast: ------------------------ Hi, I was wondering if CME has market makers for Euro FX futures or has a program that arbitrages between the futures and spot FX. Thanks Response (RSwa4rtz) 10/07/2004 09:57 AM Yes, the CME does have market makers for that contract. If you are interested in becoming one, please call 800-331-3332 and ask to speak with Scott Brusso. ------------------------------ It looks like they are looking for more market makers Any takers?
There are people at the banks who arb between the spot/fwd market and the futures. My friend does that. He also manages the $/cad spot book. I know someone else whoes full time job is to arb between Stocks traded on both the Toronto stock exchange and NYSE. They get misaligned as the $/cad moves up and down.
Were out doing some shopping, and I see I haven't really missed a lot. I think we'll definitely see the patriotic push a little later when Greenspan speaks, but I don't know from which level - have no clue. Also, I don't think we'll see that much movement into the close either as probably most traders are flat. Otherwise, I still think we'll revisit the 1.24 highs again this month - probably sooner than later. Deustsche Bank keeps talking about these medium-term buyers around mid-1.22-levels, which might try the same push over 1.24 as before - just before the same buyers reversed into sellers. [17:47 EUR/USD: Model Buying Limits Decline] New York, October 7: EUR/USD has gotten a bit of a lift this afternoon after a model bought the pair just above 1.2280. That said, traders relate one of the narrowest non-holiday range for EUR/USD since Late December of last year. This market is coiled for a large move and many traders see this as the "calm before the storm". Option vols have seen a sharp rise today as short covering is today"s main trading theme. It"s a bit surprising since tomorrow will be an abbreviated session and start a holiday weekend for the US market. Tomorrow"s jobs data could be paramount to both the fx markets and the US election campaigns, so they will be eyed closely. Treasury Secretary Snow is on the wires downplaying the outlook for tomorrow, saying the Hurricanes in Florida could have a significant impact. The parameters of the current range are 1.2265/1.2325 ands stops now exist on either side of that range and should induce some sustained directional price action.
Yes, it was like watching paint dry! Perhaps, we'll see the big bang tomorrow--200-300 pips range day maybe. Greenie's speech is coming up in 5 minutes. Bonds are creeping up.
Hehe, I don't think neither currency deserves such a run-up, and anyway there are serious questions about the US economy which any number of NFP jobs can not undo. In such case (of a giant move) I would look into entries for countering for potentially bigger profits.
Possibly, we'll see the brunt of the move in the other timezones before the NFP number, just like we have seen the last few days, but I hope not. Friday-reluctance as well as monday holiday might excacerbate the anemic late hours we've seen the last few fridays.
whooooaw. I must say FXCM was horribly lagged with regards to execution ... many minutes! Also Velocity Futures / X-Trader was very lagged with 3-15 seconds lagging InteractiveBrokers. Just go to show what a stable, proven platform gives you.