Liffe Cave In - Sterling To Return To Full Tick 23rd Feb 2009

AHA

finally someone woke up.

good news for traders like myself.

once one exchange did it the rest will follow.

still think they are doing it for the wrong reason though.

this will halt algos based companies ability to trade.

they need 1/2 ticks.

easier to push around and for transaction costs.

expect eurex to follow suit with the bobl returning to a full tick.




NYSE Euronext’s Liffe derivatives exchange will increase the minimum increment of price movement, or tick size, on its U.K. short-term interest rate contract to battle falling liquidity amid the financial crisis.

Liffe’s short-sterling futures contract will be quoted in increments of one basis point from Feb. 23, according to Paul MacGregor, director of fixed income at Liffe, Europe’s biggest futures exchange. Until now, the minimum size was half a basis point.

“We are responding to the global financial crisis,” MacGregor said in an interview in London today. “We have consulted and this is what the market would prefer. The global liquidity crisis has changed the market beyond all recognition. Moving back to a full basis point will help build liquidity in the product.”

Liffe, based in London, is responding to unprecedented volatility as financial-institution credit-related losses and writedowns related to the U.S. mortgage-market collapse surpassed $1 trillion and the U.S., Japan










http://www.bloomberg.com/apps/news?pid=20601102&sid=anNf5lbFPYWo&refer=uk

 

“We have consulted and this is what the market would prefer.

It's a pity they didn't consult the market when they changed it last year,everyone I spoke to was dead against this yet they listened only to who they've always listend to - the institutions.

Now with the contract on it's knees they've come up with this great line of 'responding to market conditions',that is a load of bullshit.This dreadful market was created when algo based companies were allowed to get away with whatever they wanted,killing off true liquidity providing traders and then pissing off when the going got tough leaving LIFFE with fuck all.

Is it a good decision?I think that traders are going to see a difference from the full tick market they left last year,no way will it be the same but could it be any worse than it has been the last 4-5 months,I doubt it.