Eurex Trading Volume

Discussion in 'Index Futures' started by forestfire, Jul 8, 2008.

  1. This article is about a week old, but just in case you missed it.

    "The interest rate derivatives segment reached 65.1 million contracts compared with 90.1 million in June 2007."

    What an incredible drop in bond volumes. How much lower can they go?

    If they had looked after the locals, maybe it wouldn't be so bad...
  2. i think there are a few points here to address:

    (1) the total volume is still very high and masks the underlying problem on the exchanges so they wont probably address the fall in bond volumes.

    (2) the majority of their business seems to come from newer products that have come on in the last few years and these products are new in comparison to the bonds.

    (3) once algo/quant based systems have squeezed all easy edges and money from the newer contracts the volume on these will decrease as with the bonds.

    (4) based on volume transaction rates for huge round trippers of which all the top ten maybe 20 customers on eurex are all algo/quant based companies they cannot be earning more revenue because these guys are trading 5-10 euro cents per round trip.

    (5) if the trend of eurex bonds enters into the other eurex products the volume will decrease gradually over time and so will the exchange revenue and share price.

    basically they are fucked in the long run.

    what does the mean for people like me.

    not sure really. still here. still paying full rates to the exchange.
    what does my account manager at eurex do for me.

    nothing.never met him. they dont contact me. they dont represent me or anything i have to say because i am just a small 2 bit player.

    goodnight and god bless.
  3. Good Post
  5. This doesn't necessarily equate to more volume. If they become more efficient they will trade less to achieve the same goal.

    Greater liquidity and depth is needed to achieve volume growth.

    I really don't think they intented to take this much of a hit .
  6. " in a few years time will be significantly higher than they are at present, due to increased effiecincy/tweaking /more funds etc.."

    I don't get this argument.
    Care to back it up?
  7. Personally I think the volumes will slip,this has nothing to do with my views on Eurex as an entity but more to do with when the algos have killed off the last few locals and the word around town is "avoid at all costs",therefore attracting no new "blood".

    If this happens then there will be less vol for the models to go after and they will all be chasing the same trade turning what are now regular moves into wild spikes which could in turn make the bund an even more disorderly market.
  9. "isn't that what locals do anyhow"

    Shit locals do,that's why the models on Eurex have chewed them up and spat them out.

    You've missed the point,it's about NOT having enough liquidity,re-read Bond Trader 50's post and all will become clear.
    #10     Jul 9, 2008