euro bond futures and options

Discussion in 'Index Futures' started by lpo, Mar 21, 2002.

  1. lpo


    Someone to have some more info or practice to trade futures or options on the euro bond.Mainly for options I got to used Cboe but if there is a better place for option I may look to move to Eurex.Thankfull for any info.
  2. bone


    :eek: Sorry for the late reply; I just joined today. I trade 150-200K Eurex capital market futures contracts/month. The options markets are VERY liquid, and are comprised mostly of "black box" market-making firms who bid/offer calls/puts according to the current level trading in the futures market, and the software legs the futures leg (hedge)automatically. The futures leg quantity, of course, is calculated according to the delta of the strike where the option was executed.

    These firms are typically WELL capitalized, and carry extensive books. It is not uncommon for them to buy/sell tens of thousands of futures contracts per day in order to adjust delta risk, and as they are "hit" on offset option positions.

    If your purpose is to speculate, the bid/ask spreads are very tight, and you should be able to leg into a straddle or strangle with very reasonable slippage.