Any one trade bund outright?
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FredBloggs
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do you mean 10 ticks profit per lot?
is the bund pro-rata like euribor (liffe) or fifo?
cheers
Oh well, I'll probably be down next week.I mean 100 euros a day (10 ticks) on 1 lot clips or 1000 euros a day (100 ticks) on 10 lot clips. 1:3, ticks : roundtrips is acceptable.
So 100 ticks for 300 roundtrips when clipping 10 lots per trade would give you a profit of around £545 after round trip costs minus maybe another £90 for the desk that day. You'd get maybe 60% to keep when you begin so about £275 for the day before tax. The larger the clip the less the desk fee matters and the cheaper the round trips become.
Eurex products are first come first served queue basis
I was asked how to look out for games being played, here is one way
One tip is watch out for "lucky" fills. If you join the back of a 2170 bid at a level in a down trend and you get filled when only 174 trade it shows that the guy with the 2000 lot has adjusted his order by one additional lot which will send his "new" order of 2001 to the back of the queue and shoves you to the front. This shows the guy with the 2000 bid has no intention of being filled long and is probably the offer at the price(s) above. As locals see the large bid they will tend to buy into the price above getting him short in the process. As soon as he gets a partial fill on his 2001 bid he will flip the order to the offer now nicely short the price(s) above. Those locals who bought are now offside at least 2 ticks and will generally take the loss by selling into the lower bids, usually his, thereby getting him out of his short.
These squeezes happen all the time and occasionaly the original 2001 bid will just be clipped out in one go. It is then wise to watch out for him "puking" this order at market, ie sell 2001 at market as it was a mistake. It's difficult to assume how much of particular orders at prices are one player's or genuine orders but after a few years you can read this action with some degree of certainty. It's especially apparent on low volume days when there is little paper in the market. This is how many new scalpers get destroyed because the squeeze will tend to be taken 1 tick past your pain threshold before the "only for show" orders are pulled and it's slammed the other way.
One tip is watch out for "lucky" fills. If you join the back of a 2170 bid at a level in a down trend and you get filled when only 174 trade it shows that the guy with the 2000 lot has adjusted his order by one additional lot which will send his "new" order of 2001 to the back of the queue and shoves you to the front. This shows the guy with the 2000 bid has no intention of being filled long and is probably the offer at the price(s) above. As locals see the large bid they will tend to buy into the price above getting him short in the process. As soon as he gets a partial fill on his 2001 bid he will flip the order to the offer now nicely short the price(s) above. Those locals who bought are now offside at least 2 ticks and will generally take the loss by selling into the lower bids, usually his, thereby getting him out of his short.
These squeezes happen all the time and occasionaly the original 2001 bid will just be clipped out in one go. It is then wise to watch out for him "puking" this order at market, ie sell 2001 at market as it was a mistake. It's difficult to assume how much of particular orders at prices are one player's or genuine orders but after a few years you can read this action with some degree of certainty. It's especially apparent on low volume days when there is little paper in the market. This is how many new scalpers get destroyed because the squeeze will tend to be taken 1 tick past your pain threshold before the "only for show" orders are pulled and it's slammed the other way.
FredBloggs
Guest
thanks.
FredBloggs
Guest
interesting stuff.
given that locals love to lean on volume, and these kind of tricks, why not just join the offers if the market is in a downtrend (as stated), or lift the locals bids as they jump infront?
is this too simplistic? is it because a lot of these scalpers are paid/get rebates for adding liquidity so they dont mind jumping in front of a steam roller to pinch a tick?
i can see that this kind of method can get you in the market easy enough (as youre going against the trend), but when it comes to getting out and banking profit you are trying to get filled with the trend - so you have more competition for orders, and possibly more risk as the trend is now (seconds/minutes) older, and thus nearer the end.
wouldnt a more risk adverse strategy be to worry about getting in and assuming risk, but happy that you can get out easily should you get a fill?
guess i must be missing something here - cos i know a ton of you guys are doing this and doing ok.
I agree but there are so many scenarios where the down move is overdone (within 5/10minutes) and/or there wasn't actually much selling volume at all.
In the example the market has been selling down, nothing massive just intraday small trend and it's a level on your chart, maybe it sold down on very little volume, each 300 lot down at market flipped a 2000 bid to the offer. Or it was genuine size selling but the selling slows, it's now being absorbed and the bids return to provide support, maybe 3000 lot bids for the next 5 prices below your level so you think looks good for a bounce or full on reversal. Maybe there was paper selling but it's complete now, they only wanted to sell to that price, odds are short locals will read this too and start getting out, so you buy for a tick or two at least on this fact alone. In a high volume market with paper this will generally be a good decision.
The danger is the 15,000 lots of bids below the current level, bar a few hundred extra are all one big local's - believe me locals do have this size - and he can see that 90% of the bid volume is his. He then spoofs the bids up the market "showing" support for the bounce and driving people into buying his offers. If he happens to only be 25% of bids beneath the level then he'll probably buy for the bounce like anyone else flipping large offers bid on any at-market buying. How can you tell, generally you can't.
It's only when he sees he is most of the bids/offers he can play the market manipulation game and often you will see the 5 prices of bids removed accompanied with an at market 1000 lot sell blipping a lot of locals instantly 6 ticks or so offside who then scramble to get out selling at market. Perhaps there are genuine paper buy orders now 5 prices lower here as well as his, so he'll buy in ernest every price he just sold.
The point is maybe the "down trend" you are offering 4 prices above market on the way down isn't a real down trend, even though it looks like one it's just a squeeze down to get long at a much lower price before a fast drive higher thus filling you short and trapping in a fast up move. So you probably say why trade such an empty market but it's only after watching for a while you realise this is what's happening, it's typified by massive bids and offers and low volume with nothing on the calendar.
The paper can come in any time and mess with this game taking whole "show"orders out at market and you can see these guys getting taken and having to ditch at market - amusing to watch. Because this only happens rarely, maybe when a fund repositions, a large manipulating local takes the chance and overall it's extremely profitable for them.
It's very difficult to put into words, all I can say is have a go and be aware, or position trade from the charts but that's a diffferent sport.
One advantage of being in a large office is you can hear when others are caught and capitalise on it.
Oh and if the manipulation isn't going their way for some reason then they can drive a quiet market such as Tnote in the morning into "persuading" the bund to help them get out, tnote, bobl shatz whatever, you'll be able to link this coordinated spoofing if you watch the flow for a few years.