Spoke to the Eurex guy today, there is a proposal for all Eurex products to convert to half ticks sometime next year, following that of the Schatz and the Bobl.
That will be the curve f##ked even more then. I would be very suprised if retail accounts have found that the extra half tick pricing was lending itself to better fills. I would have thought the reduced liquidity and extra volatility has probably introduced more slippage. Still its better to have the people in suits who have no personal experience of trading the markets to make the decisions on its function hey. Jokes the lot of them. Its just the same as Euronext liffe who are very happy with Sterling having gone to halfticks. Personally I look at it and think its the biggest micky mouse contract going. I would venture that liquidity in it was even better on the floor than it is now.
Throughout the history of time " the suits always know best...". I guess it was inevitable that we were eventually going to see all of the EUREX products trading in half ticks.
I can totally believe that,we had a couple of guys here doing the graveyard shift in the bobl who found it was ruined when they took it half tick. These clowns have no idea how to run an exchange or what the market really needs. Thanks for the update.
The lower volumes I think it also has a lot to do with the Financial crisis. Banks and Funds are just a lot more carefull with where and how they invest their money and therefore Futures markets as well as other instruments are being affected. Not to mention lower number of investors. With people saying that Eurex is an exchange for blackboxes, well, all of exchanges are investing heavily in order to facilitate black-box trading. CBOT has always been way ahead of Eurex in that aspect, but recently Eurex is catching up. But the truth is, it is getting harder for locals to make money, and if Eurex does make the Bund half ticks, well, I think the bigger locals will be the ones that will get affected most. Imagine how thin it will get. Anyway, good luck to all!
Spoke to our Eurex account manager, who also spoke to product development. They said there was no truth in this rumour of half tick bunds. Guess time will tell
Any idea why the BUND volume is so low today?? I know there has been no data etc.. but come on, 300k by 2pm CET? Whats going on!!??
By the EMH, profits == inefficiency. If locals, scalpers, and market makers are generating profits, there is clearly inefficiency in the market. A change that reduces the profitability of locals, scalpers, and market makers, is a change that improves efficiency. This is a Good Thing. (unless you happen to be a local or a scalper or a market maker).