...this way we could have a much more useful EurexUS. Instead of splitting liquidity in US Bonds, why did they just not introduce effective electronic trading for CBOT Grains, Soybeans etc. or Live Cattle products. These are still 99% open outcry and still need shifting over to electronic. Has anyone info why Eurex/DB did not take this step ?
bebe, you sure ? I heard Eurex will add a few contracts, based on NFA approval, but these are EUR denominated DAX, Bund, Stoxx (24h trading). I heard nothing so far Eurex will introduce any commodities.
I think the reason why Eurex is not introducing ags,softs,energies is that they are too small for them to bother. With the execption of Crude and Nat gas maybe even Corn, all the other ones are too thin volume -wise to make $. Furthermore, I read in books (written by ex pit traders) that once something gets really volatile such as Cotton months back or Cattle weeks back, open outcry is a much better venue for it. Why?
CBOT Corn / Wheats trade 50k - 100k a day. The energies (crude oil) and gold are also very liquid. They do more vol than most stock indices. I would like to study these, but as open outcry, this makes no use to me.
Here is another possible reason. Eurex contracts are financials so delivery of paper ,bonds,etc is simpler. Ags, require warehouses, grading houses, ports, and other infactructure native to phyical commodities which are not as easily duplicated. My guess 3-5 years?
Yeah, right. I know Eurex has no experiences with physical contracts. But I had thought they should be able to overcome this. The reason I started this thread was today I read CME will now massively enforce Eurodollars -> Globex, due to Liffe competition. Next, commodities are the last final bastion of open outcry trading. These contracts should go electronic as well.
it hasnt happened in grains, i worked on the grain floor and can say this... it was inefficient, when somthing happened scores of runners would pile up to a filling broker holding their orders out, for the locals trading their own cap. next to the brokers it was like shooting fish in a barrell.