LIFFE Sterling Half Tick Decision

Discussion in 'Financial Futures' started by billynomate, Jan 29, 2009.

  1. What more can I say, we were told the industry was crying out for half ticks. having spoke to several big bank players in the market they said no to it.
    All the sterling locals said no to it.Liffe took the step and in a time when markets went wild ,volumes and open interest crashed. Instead of us locals doubling our size to counter the loss in tick value the effect had opposite affect..!!!!.
    It seems this half tick decision was really for the benefit of the black boxes.
    Even for non uk traders, the depreciation in the pound makes the Sterling pit even less attractive ( £6.25) , what American or European wants to trade it.
    On average its 50 lots a side with depth not really there just algo generated.
    Locals (me included)have and still are leaving it in droves
    I do hope they hurry through the full tick decision ASAP. or im afraid it looks like LIFFE BUND part2.......!!!!!!
  2. Agreed, it's a total sh1tshow...
  3. yo billynomates:D
  4. bidask


    help me understand something. why did volume drop so much?

    you're a market maker, right? before when it was full tick, you made money buying at the bid and selling at the ask? to do that, you needed other people to buy and sell at the market.

    now that it went to half tick, why did those other people disappear? i can see why you make less spread, but why would the volume disappear?
  5. Glenogy


    if you read the first post he explains why volume has dropped..
  6. bidask


    i'm sorry but he didn't mention anything specific other than the market lost volume in general and the GBP depreciated.

    i thought he was saying that the move to 1/2 tick caused the volume to drop.
  7. Glenogy


    That and locals now doing half the size they was which is less for banks to hit so stopping everyone from trading........did you ever look in there when it was full ticks ...?? it is unbelievable how much the contract has changed !!! it has now become untradeable!! well done liffe for shooting themselves in the foot and not listening to a huge percent of the market that wanted to keep sterling full ticks and also telling liffe that it will kill the contract!!!

  8. bidask


    why are locals doing half the size. the original post said locals are trying to double their size.

    also, the original post seems to suggest that going to 1/2 tick helps the black boxes and these black boxes just put 50 lots on each side of the spread. so it seems that these black bloxes are market making too. if they're market making too, then wouldn't they also want full tick instead of 1/2 tick?

  9. So , as you seem interested in Short Sterling, do you think half ticks have improved it?
  10. I totally agree that it was the worst thing they could've done to make the sterling 1/2 tick.We used to have a few here who had a handle for that market and were forced out when they changed it.

    The question is if they change it back do you think it'll make any real difference,rates going to 0%,cash market is dead,quality locals trade elsewhere and if it does pick up LIFFE will go back to 1/2 ticks ASAP.Personally I think it's the end of the contract,of course there will always be volume/open interest but how long before it becomes the swiss?
    #10     Jan 29, 2009