Hi All, I have been looking on and off at GE for many months now without making a single trade. I am quite puzzled by the very few trades I observe (using TWS) as compared to many other minis. The bid/ask sizes as shown on market depth are impressive though. Any comments? Thanks. nononsense
Hi dunleggin, Thanks for the link to RBS Greenwich. Unfortunately i don't have a password. Only managed to read that one sentence that ED 1yr butterflies are all rich. Do you have the gist of his commentary? It seems like the short-end ED curve's inflection point is the GEZ05. Everything seems to be caving in there. However all front month spreads have widened tremendously. I'm thinking whether the Z05H06 spread is the next to widen. I compared the EDZ05H06 spread with the narrowing of the 2-10 yr spread since June 2004 and its pretty much gone the same way. The z05h06 spread has narrowed from 28 pts then to 10.5 today (I know cos I just bought some... we'll see how it goes ) I just think that the 10 year is due for a correction, that inflation might start popping up unexpectedly. From a technical pt of view, a support for this spread looks about here. As always, timing is everything.
That's a pretty volatile fly you've picked my friend! Never tried that myself. My lil heart can't take those fluctuations! It does look toppish chartwise doesnt it. I'm just short the U05Z05H06 fly. Unleggin them for a profit is a real pain in the a^^ though..
Youre absolutely right Fred. A 3 month fly is certainly less volatile than a 6 or 9 mth. The quoted bid/ask size for 3-mth flies these days is pretty impressive. I remember a time when I put in a 120 lot order for a butterfly on Globex during Asian Time about a year ago and it seemed like I was the biggest order! Cheap thrill eh!
Its great to learn from other ED traders here. I got a question. I hope someone can help. If US stocks start to show signs of weakening, will ED spreads narrow? If so, which is going to be the pivot month?
are flys seasonal as well as spreads? I guess they must be - i just never hear anything from moore research about flys. sorry - cant help much with the other questions. i tend to trade what i see. i tend to focus on cal spreads - although i really should start looking at flys too. at the moment i see the major trend is down (front-back), but there does look to be a bottom in place on the longer term charts. so, im sitting on my hands until the trend reasserts itself or i get more upside confirmation - then i'll start looking at the various months to see which gives the best opportunity. im aware of seasonality - but dont give it as much attention as i should if i am honest.
I think it would depend on why stocks weaken...ie: quicker rate hikes vs. poor earnings results... by the way, observed some serious clips in the Sep05...5000 sold at 46.5 (Goldman) and 5000 sold at 48 (Goldman again) while the Dec05 looked heavy initially, big buyers came in eventually (don't know if it was ole' Goldie but he might be unwinding flatteners?) while Mar06 seemed to be bid all day long...as I said probably due to some of the recent curve flatteners coming off...