The following spreads used to be an Auto-Faders dream and provided many people with an easy start to their career. Many people were consistently profitable with-in 3-4 months of starting their trading career. For every 10 trainees that came in, let's say 4-6 were still there with-in a year strictly because of the easy nature of these products compared to now. The success rate of trainees that was built from the relatively smooth learning curve for these curves. I am forever blessed that I was lucky enough to sit in these and size up tremendously every 2-3 months for 4 years straight. In the future, there will be other 'easy' learning curve products out there but I don't know which ones and most people keep it to themselves (until they get weeded out and have to adjust all over again, or simply fail as a trader altogether). These products let you do ridiculous things such as; average wide prices, have a loose stop, and hold through most Tier 1 figures (U.S. figures) and still be fully hedged... whilst mean-reverting 90% of the time (Not an exaggeration, 90%). You did not have to take any directional punt on any market, just basically put up the chart and fade spikes. Unfortunately, now, you have to use your brain a lot more. There's a lot more context, and the win-rate of "mean reversion" has strongly declined from 90%+ down to the 50-70% region for most. Products 1. Australian spi hedged with s&p500 in the Australian night session (Eurex + U.S. session) cqg code: AP/EP 2. Australian 10-yr bond hedged with U.S. T-note in the night session (Eurex + U.S. session) cqg code: YIELD(TYA)-YIELD(HXS) 3. Australian 3yr-bond w/ 10yr-bond curve was easily fade-able in many areas just going in blind for a few years cqg code: HTS-HXS None of them work as auto-fading strategies anymore because from 2011-2016 (current) the Aussie market bid/offer went up 500% in the 10yr-bond (from 50-200 lots up to now 600-1000) but the average volume only increased 200% (from about ~20k up to now ~40k). There's twice as much activity over the past 4-years but 5 times more competition sitting there. These numbers are kind of strangely accurate, if you estimate it's now "2.5 times harder" and speak to most people who traded them a year ago to now, most will say the auto-fade trades can't be put on every day now and instead once every 2 to 3 days. I've moved onto many new easier things but the skillet required to make money in these products now, is so laugh-able, that you can make so much more money and with less effort if you just bothered to trade a real market with-out enormous basis-point bid/ask spreads. Australian markets are now in that ugly toddler stage; Too mature for auto-fading and office-wide market making strategies with decent size, but still too immature because of the clunky pricing nature of our Bonds/Bills and without a 5yr or proper 20yr contract (there's only 1 bid/offer in our 20yr bond). In the past, an order of 2000 contracts could send the 10-year bond deviating like 3 basis points away from the Treasury Notes.
Interesting, I never looked at these. There are still arbitrages you can do today that are no brainers but I'd rather not give it out here