Swiss Franc Future

Discussion in 'Financial Futures' started by Vortex, Jan 20, 2012.

  1. Vortex



    I have noticed that of all the currency futures traded on CME, the "major" pairs all show good trading volume which reflects their liquidity ranking in the spot market...except, and inexplicably for the Swiss Franc!

    Why on earth would that be? It is usually the fourth or third most liquid instrument in the world, yet, here in the futures market it is almost a non-player. Any ideas why?

    Thank you kindly.
  2. Vortex


    Thanks, but as a systematic professional FX fund manager in Zurich for the past 13 years, this lack of interest in the CHF future could be a total misinterpretation.

    We trade both USDCHF and the EURUSD in the spot-market and we hardly ever have the same signals, positions or exact movements in both. Even if we do, the stops and entries are sufficiently different to be a diversification.

    The SNB has "comitted" itself to protect the 1.20 level, not *peg* the CHF, using their usual serious language. This means they will "try their best". A simple EURCHF chart will show they are not pegged.

    I can tell you from personal experience that the SNB is known to use media tactics like that press release to create the illusion of protection. They simply cannot afford to protect it against the world's traders. But they are very good at creating a level which is now seared in the brain as a "definite level".

    Thanks for the answer though, but that seems very weird.
  3. I think you should talk to the CME, Vortex, become a liquidity provider and punt the Swiss Franc futures in massive size. There, problem solved :).

    In seriousness, it's very simple. The CME FX futures (pretty much all of them, not just the Swiss) are much less deep and liquid than the spot mkt, 'cause they're not in demand.

  4. Exactly what I would've said...

    I trade futures(mainly ES and euro 6E) exclusively for my clients and my personal acct. On occasion i have traded the swiss franc future for my clients, but now that it is pegged to the euro, and lower liquidity... why bother?
  5. Vortex


    Thanks to both ^. :)

    Have a great weekend! :D