So I trade some commodities markets with some success and one of the indicators/levels I mark out is the 'closing time' for these markets. That's not to say that they are actually shut, it's just a set time when traders settle the books. E.g. ES/SandP futures it occurs at 19.55-20:00 (UK time) until the clocks change. I was wondering if anyone has any institutional experience away from simple retail which could provide some insight into whether spot fx pairs also have this 'cash out' time, and if so what they are for the major pairs? I'm aware that there is no centralised exchange for FX, I'm assuming that someone with institutional experience would know whether the spikes in their own liquidity pools are mirrored across others in the same pairs. And while I know there are futures markets for currency pairs, I know that the volume within them is tiny in comparison to spot fx so don't really see how this can be used. Could be wrong though.
4pm london fix but also - but less so - Tokyo fix 9:55am tokyo, and NY fix at 4pm ET. They moved to hourly fixes a decade years back, but the London 4pm fix is still the main benchmark. The roll @ NY 5pm is closest thing to 'closing time' though. Spreads widen, buckets gauge the price, and of course all the swap rates get calculated. Easily seen on a chart. re futs volume, don't use it, but I know other decent traders swear blind it's useful, so be slow to dismiss it. Also, not institutional if that bothers you
Thanks very much for this. When you talk about the fixes is it the same as the ES where large vol comes in from 8.55-9pmpm (UK time), so it would be 3.55-4pm for the London fix (most likely the few minutes before 4pm though) and the settling is then finished at 4pm? Many thanks once again.
No problem. Not so much anymore. Because it’s a reference benchmark, not settlement time the most common reason for hurrying a trade through is usually because you’re trying to manipulate price to screw your client. Fines, threats of jail years back means now if it goes on, its way more stealthy. Biggest spikes happen on cross-over of sessions, especially uk /us, the roll (low volume), data releases and just after the cut (10am New York) . Cut is the option expiry, and sometimes they unload delta hedges at speed. And finally for NFR, no fucking reason…
In institutional FX markets, there isn't a formal "closing time" like futures, but liquidity tends to thin around key market hours, notably at 16:00-17:00 London time due to the overlap with US market close. Liquidity spikes in major pairs typically align across different liquidity pools, though spot FX remains decentralized.
hi Jorge, Thanks for the reply, am aware that it doesn't really close and that there is no centralised liquidity pool/exchange. Any idea about EURUSD-does it basically start at 7am UK time with a big 8am open?
More or less yes but not quite as marked as opening bell. All pairs mirror stock exchanges, so 7am Frankfurt (UK time), 8am London etc.