Those with the fastest toys...win...this is trading capitalism...if you have an edge, then you do not need to win the arguement, just grab the money...welcome to America... Any quants here?
surely you can see that an app arbing between spot and futures woudl take advantage of that situation
SCC, I am not talking about Arbing or a true hedge between futures and actuals, or spot pairs and futures, what I am talking about is a programmer looking for a programming weakness or a glitch within a brokers execution platform, these can usually be found in very short time frames, 10th of a second, which explains the insistance on speed and perfect timing. I would even say that arbing between platforms is fine in my personal view, although most retailers don't allow it under penalty of whatever, so if someone has signed agreements not to Arb, if they do and get caught well they knew better. The Ever Observant VIPER VIVO RAINHA ELIS
sscz, I understand the concept, of course, but I really don't see the fx bank traders in the futures market, so it really wouldn't affect them. What you are talking about is what I consider to be true arbitrage... I could be wrong, but a misquote is a whole different animal, whether or not we think it's right or wrong to profit from it. A couple of Sunday's ago I had CX up and the bid was 3 pips higher than the offer. It lasted awhile. I am all about capitalism, but I couldn't get myself to whack it. As I deliberated, it moved back to normal. I would say at least 10mm went off that way. Now this was a Sunday night, probably about 6PM EST. I am not an arb trader, so I am sure I could be missing something. How would the futures market correct that?
I understsand your point .... I'm just trying to say that any number of arb apps (of whihc speed is also of the essence) would also take advantage of this situation without speicifcally being designed to do so. Also, arbing between platforms is really just the same thing with respect to what we;re talking about (the fx ecns). Let's take lava and currenex for example. They're different platforms but excluding any customer bids/offers, your trades on either platform coudl end up going to the same bank. THat is to say that he set of banks for lava and the set of banks for cnx are not mutually exclusive. if lava was quoting 80/81 with these quotes coming from say ubs on the bid and db on the offer, and cnx was showing the same. What if citi were to come in and accidentally offer 78 and you only get citi quotes on cnx. You woudl be ok with buying at 78 on cnx while at the same time selling at 80 on lava. How is this different from doing the same just on cnx? The orders are getting filled by exactly the same banks
We are using the CX Java API not their FIX API, but I was told by the programmer and other sources that the speed of execution will be similar. I will know by next week. Long Eagle, I don't know if all banks are on RFQ, but the CX guys told me that sometimes there are "issues" with some counterparties taking longer to execute. He also said that if that happens a lot with a given counterparty, the trader could ask CX to drop that counterparty from the list. I really don't understand what obligations banks have when they post a price and what they do when you hit it. There seems to be a lot of mystery behind this ordeal and no one knows for sure. Who polices these banks anyway? Does anyone know what banks can and cannot do when they post a price in Currenex? I have not found this information anywhere. What charts, Viper? I thought that you had a rig to chart their data. Is this what you mean by "their charts?" Furthermore, anything we do is "manual." No programmed SCALPING of any sort, even though I don't have anything against people that take advantage of price discrepancies. Banks should provide appropriate pricing or get out of this game. Just my 2-cents worth.
What are you doing when trying to trade the news then? Surely you are attempting to trade the figure before the price engines have reacted?
arbitrage, arbitrage, the word has lost all its meaning, ffs they even have riskless arbitrage now. The fact of the matter is prop desks and hedge funds run arb apps 24/7 from spot/futures in the fx,eq idx,cmdty mkts to adr-pairs arb. The reason why you see this on cnx is because (if I am correct), banks themselves only provide liquidity. If no trader takes advantage of the quote, it'll stay there until the bank reliases and removes it.
As I understand it as well on some of the currenex applications the futures price is one of the price feeds anyway, adjusted back to spot.