That reduction in Sterling traders is similar to what we have here,I also have yet to find anyone who prefers it with the 1/2 tick. Yesterday the total volume for all delivery months was 174K,that is pathetic considering U9 ED did 212k on it's own! LIFFE have screwed up here bigtime and agree that it's too late to bring it back,can you imagine just how shit it's going to be in there leading up to Xmas.
It might well be too late for LIFFE to bring it back but there is a rumour that is now picking up pace(and I must stress here that I have no facts to validate the claims) that CME are interested in launching a full-tick Sterling on their Exchange as they've seen how disastrous the 1/2 tick version has been and feel they could add a solid contract to their arsenal by actually listening to what traders want and bothering to run it properly. LIFFE launched a EuroDollar contract a while back(it now does ZERO volume)so I see no reason why CME couldn't and wouldn't launch their own Short Sterling. Let's face it,LIFFE lost their flagship Bund to Eurex,why can't history repeat itself?
I hope this rumour is true,I am trying to find out. I know volumes are down everywhere today but the Sterling is getting pretty laughable.By 2.30 the front 5 have managed 75k lots with front Z/H 500 lots only. When are they going to learn? When it's too late as usual!
I reckon they must have thought all the traders would just put up with being taken for fools and get on with it - halve the tick-size and therefore cut everyone's profit in half,severely reduce the liquidity so increasing traders' chances of getting caught but amazingly leave their fees the same. There's no way they could have predicted the mass exodus that occurred.In my office all the traders who put any sort of size through have walked and all that's left is some juniors who have 5 lot positions - and even they are getting sick of it.
Most of my trading is in the schatz market but I do occasionally trade euroswiss (talk about a dead contract but usually pretty good product to catch stops and scalp against a big paper order when it comes into the market) I didn't start watching sterling until after it went to half ticks......everybody I talked to said it was a great market to trade then but now most of those guys dont even bother. I have yet to trade it but just from looking at it it seems really choppy and spacey.......I could see how a newbie to that market could get eaten up!!!