Fred, I spoke to a guy in Chicago who trades ED actively in the pit, and asked him the same question. He told me to look at M5 and U5. Volume is still there to do whatever size you want and the volatility is much higher than the front months. I'm in the same boat as you, momentum equities trader looking to make a move because volume dried up ahead of this election. Anyway, that's my 2 cents.
Fat, M5 and U5 are fine---remember when a market is 24 hours (esp fixed income it moves 24 hours a day). Pull up tick charts instead of minute charts. The transition to all electronic fixed income markets has made this an imperative for momentum players. For instance, I had to adjust from a 30 minute bond chart (day only) to a 450 tick all session electronic bond chart. This was a pain in the ass for me. Especially since Cqg did NOT have tick charts up untill just a couple years ago.
i keep thinking that this ge thing is gunna be like falling off a log after trading equities. rather than trading 20 lots of ym hoping for 10-20 tick move, i could trade 50-100 lots for a 1- 2 (full) tick move??? i just know im missing something here because if it seems to good 2 be true - it usually is. i guess the pro rata will come into play - suck it and see i guess....... [/B][/QUOTE] the pro rata you talk about is different in ED...as I posted earlier, if you improve the price, no matter what size you do (ie: 1 lot or 1000 lot) you will get filled first no matter what size comes behind you...however, apart from that scenario it is down to the biggest size gets the more generous fills...it helps to know this when trading ED, but in my experience if the move is going to occur, you're either in or or you aren't!lol but again you touch on what I think is a great feature of ED...bigger size, less noise...though, the increased on screen spreading activity is providing some interesting trading... anyhow, any one else finding these ED markets increasingly difficult ahead of that pesky election?
Forgive my ignorance but what exactly you trade when you trade the EuroDollar futures ? any correlation with the Euro FX currency future ?
It's the ED futures contract on the CME. It is traded on globex as symbol GE. It is a short term interest rate contract, so it is related only tangentially to eurocurrency.
The spreading act. has def. picked up as of late. Also, alot of the options hedging has been going through the screen as well. I dont think they are more difficult.......However I have found that I actually have to look away from the screen sometimes so I dont get caught up in the book!!!!
That's an important point, IMO - the options market in EDs is deep and active enough for the hedging to have an impact. Other players in GE/ED are also significant without having a directional motivation...e.g. hedging by swaps traders accounted for 40% of ED volume a few years ago. 'Quick and dirty' hedging using ED strips by treasury dealers is another. Spreads behaviour has changed with the migration of flow to Globex. At the same time, volatility has been steadily heading south in front and back months. While it still appears an attractive contract for scalping and intraday, will the very attributes that are proving attractive to most of the posters here lead to those conditions I've seen lamented recently in other deep markets? Tradnglife, I'd agree that elections are a factor in the action right now. As is the fact that the market believes that the course of rate hikes is quite transparent and predictable. In fact, there's a sort of Soros reflexivity at work here between the market and the Fed. Almost invites a black swan to appear.
The book is increasingly becoming something that I need to ignore. When I put a trade on, it is generally for 1 - 2 1/2 ticks. My signal is generated, I put the trade on, and next thing I know, some large option or swap hedger has put 12,000 contracts into the bid / ask...and always the other way. Lately (last 4 months or so) this has almost become a conformation that my direction is correct. I, too, need to walk away and just let the trade work. The book has become my "noise" in the ED market.