it also adds liquidity into the outrights for those of us who trade them by adding to the "implied" bid or ask, the quantities on either leg of a a spread order.
If by eagle you're talking about the reduced tick spread, I've taken a look and the contracts simply don't move. I understand alot of guys are legging into the spread and then taking it off with the rts, but I don't see it as being tradeable on it's own. Keep this in mind though, I'm just an equities guy right now trying my best to figure these out, so take it with a grain of salt.
trdinglife, If you ever have the time, I would really appreciate a short phone conversation. There's 3-4 other traders in my office that are looking at the eurodollar but none of us know anyone trading it successfully at this time. At least not the electronic version. If that's possible, please email me at fatfozzy@yahoo.com and we'll figure out a time that works for both of us. Thanks in advance.
fozz I'll send you a PM...but any general questions about trading ED that you have may serve this thread well anyway so posit away and I'll try, and I hope others try as well, to respond constructively...
Does anyone know of a quote package that gets quotes from eagle? I expect cqg does (but not 100%) are there any others? my quote package just allows an expression so z4-h5 will be exactly that the z4 bid - h5 bid etc - the result being that the bid and ask for ed spreads are the same!! Surely this isnt so. For those interested - check this out.... http://edge.cme.com:443/index.html 'real time' ed spreads and outrights - so obviously my data vendor is wrong - the spreads arent the same!
just looked at the link you sent. The bid in GEZ4-GEH5 spread = GEZ4 bid - GEH5 ask, etc... looks finr to me.
sorry i wasnt clear. on my quote system, i get say 23 for the bid AND 23 for the ask on spread edx5-edy5, where as the bid ask for the spread should be say 23/23.5 as shown on the link. this is because (i think) my quote is just subtracting 2 values (from each leg of the spread) rather than getting the correct quote from eagle. Anyway - looks like ive got a shit quote package (futuresource) so what. now i need to get a new one! lets talk about making MONEYYYYYY!!!!
Yes, an interesting thread that has had me watching the action for the past few months. Mauldin's piece from last fall (section on Fed vs. Bond Market) has an interview explaining the influence of Fannie Mae and Freddie Mac. Been trying to grasp some of the concepts the big players and bright stars of finance deal in daily in this market. It's tough. http://www.safehaven.com/article-1048.htm Geo.
Interesting article for two reasons...the first is the date of the article October 2003...the second is the explanation for the way Eurodollar is skewed by Fannie Mae and Freddie Mac... 1st...in the article the author says he can't believe that the Eurodollar was pricing in a fed funds rate of 1.75 by december 2004!!! and that he wonders what the guys trading Eurodollar are thinking and smoking....and then goes on to list all sorts of reasons why fed funds were going to be on hold for a "considerable period" Hold the phone...where are rates now, on September of 2004 no less...oh that's right 1.75 and looking to go higher! 2nd...he talks to an analyst, that no doubt is very smart, but the explanation of the 'carry trade causing a massive skew in interest rate expectations is a bit to orich for me...yes the carry trade did exist, and it wasn't just Fannie and Freddie but just about every large bank or investment bank had these trades on...so yes there was a premium attached to Eurodollar as these guys paid up on their hedges...but to chalk it all up to that is just bad science...and the best evidence of that is the point I made about where the fed funds rate is today...it is not a coincidence that the bond market has always been known as smart money. the 1% fed funds rate was an emergency rate that could never be sustained in the face of any signs of a strengthening economy...end of story....I hope I don't sound too bitter...but there are reasons why analysts are not traders...