http://www.futuresindustry.org/fimagazi-1929.asp?a=784 Please check this out. Excellent perspective on why the Chicago exchanges had better stop splitting liquidity... the clowns are going to give away the circus, especially when Eurex offers US derivative products.
Excellent interview. It is gratifying to read someone from PIMCO saying the same thing we gripe about. Eurex or someone else could come in here and steal the Chicago exchanges' whole applecart while they are diddlying around trying to protect the floor's advantages. Look at what IB has done to FCM's.
Yep, good article. Well said. The Eurex may take the chicago boys to the wood shed. You would think they(CBOT/CME) would take a look at the CBOE and figure it out, but I guess not.
Just unbelievable. Eurex traded two million interest rate futures contracts today. Been doin' it consistently. No sweat. And now, the CBOT's gone and pissed 'em off. What idiots. If Eurex lists a U.S. Ten Year Note and Eurodollar contract... Chicago's done. Cooked. Dead, dead, deadsky. RIP. By the way, I did this post just to crack 300.
Well my prediction is that America is going to kick Eurex's ass. I'm going to call it first on here. I think the CBOT, the Merc, and the CBOE are going to merge to one exchange. There will be one clearing house and one electronic platform. They will also modify their contract specs. They will make their existing pit traded contracts larger and will cater to the insitutions and the electronic contracts will be a watered down derivative for the small retail guy. This giant exchange for the first time will offer every interest rate product under the sun and they will all be traded togethor. They will blow eurex out of the water. There is a lot of loyalty in this country to the Chicago exchanges, it's just a matter of making the whole thing work so it flows like a well oiled engine and it will. And for those of you that think the pit is going away. Have you ever tried trading size on a screen before. Try buying a 1000 lot or a 5000 lot on the sp mini and let me know how that fill goes. Bottom line is you will never fill size at a better price on the screen as you will in the pit. Some people appreciate that cost savings and it does add up. If you want to send a 1000 lot to the spoos pit, you will get a fill in one sec in the crowd and probably save several ticks from the screen. The Eurex is very desperate right now. They tried to merge with the Philly, philly said beat it, so did the PSE and they are on the verge on going under and still turned them down. CBOT and CME just laughed at them. Now they are trying to hook up with the BOX but BOX doesn't need them or want them. So now they are talking to regulators to form their own independent exchange. Good luck. But if you guys think Chicago is going to roll over and let that eurotrash exchange come in here and make better mkts then us then we'll see. One exchange in Chicago, you heard it here first.
straight from the horses mouth...... Damn im glad I bailed in 2000 when the treasury announced the scaling back of the 30 yr.
Maverick-- Nice call but I think you may be wishing. While I have never traded size in futures contracts, I have spent time on the floor and I am friends with and work with guys who have been on floors and I have sent orders to the floor. When I traded the big (spoo) contract I always and I mean every time except once, I got the worst fill that I could have possibly recieved give or take the few minutes of trading around the time of my order. I mean every time. It got to the point where I just looked for the worst price and I knew it was mine. Now was this a coincidence, I think not. It is why the floor loves paper, they like to screw it as hard as they can. I have heard all the stories. Now while I do not trade size I think every retail trader who ever interacted with the floor knows what I am talking about, Heck it is why I became a member of an exchange. So just about everyone using the screen believes they would rather interact with the screen than a desk, a broker and a local. Now I am sure there are exceptions to this way of thinking and I am sure there are some really great brokers, but there is almost no doubt about it, a good pit will lose to a good screen. The eminis are proof that the screen will conquer. And it seems to me but every month the mini seem to be deeper and the floor seems to be quiter. If I did not think this was the case, I am sure I would be leaving for Chicago tomorrow.
maverick, I respectfully disagree. Institutions have clearly shown their favor towards trading electronic contracts. The exact same arguments you are making about size were made by LIFFE when they owned the BUND contract. Eurex came in and stole a contract that now trades around 20 million contracts per month. IMO, the only way for the Chicago exchanges to compete is to lower their fees and offer all contracts on an electronic platform. Perhaps side by side may work but in the end, if they don't go electronic, they've got big trouble. Why would Eurex want to try to purchase/merge with a US exchange? If they did, they wouldn't have to worry about licensing and regulatory issues when they enter the US. Eurex knows what they are doing. Hopefully the Chicago exchange will get the wake up call and react quickly to compete.