I notice quite often on a footprint chart (let's say one minute footprint chart) that there is a significant number of contracts traded at a certain price without price moving-here I am talking about FX futures in particular. Quite often (a few times a day at least), this amount of contracts trades in a single second. Say, today, around 11:24am about 500 contracts hit the bid at 1.2735 in 6E within a single second(!) and the price didn't move. Clearly there was hidden liquidity at the level. I am seeing this day by day in various FX futures. Is it just arbitrageurs sitting on prices arbing vs spot FX that provide this liquidity? I am trying to figure out if someone has a clue as to the origin of this type of liquidity.
One guy wants to buy 500 contracts. he goes around and asks if anyone wants to sell 500 contracts. he finds someone, they agree on the deal. seller throws out an offer at best ask (hidden or not) and buyer buys it. Case closed
What you are suggesting is old school type trading, whereas some transactions may happen like that it's quite unlikely here, many times this liquidity shows up at the peak of a fast move... there is no time to 'go around and ask'.