Bobl 1/2 Tick
- Thread starter THE-BEAKER
- Start date
I've always been hugely against reducing the minimum price change for any contracts but it does make sense to stop these algo-spoofers/flippers,maybe even level the playing field.
If Exchange fees stay the same and the price change is reduced,being bid and offered all day for more than you ever intend to do would surely be too costly in fees alone,let alone that they can't screw around with the genuine market as liquidity would become layered.
I saw some spoofing in the Bobl today but not a patch on what it used to be i.e. every bid and offer at every price.No doubt all the algo-tossers are working out a way to get around it - roll on the quarter-tick!
If Exchange fees stay the same and the price change is reduced,being bid and offered all day for more than you ever intend to do would surely be too costly in fees alone,let alone that they can't screw around with the genuine market as liquidity would become layered.
I saw some spoofing in the Bobl today but not a patch on what it used to be i.e. every bid and offer at every price.No doubt all the algo-tossers are working out a way to get around it - roll on the quarter-tick!
call me old fashioned but the bobl volume seem to be lower than the shatz every day now.
i know its early days but the with the market volatile than before the eurex volume seem to be dropping off.
as for the bobl 1/2 tick im still un decided.
its very easy to get legged on spreads and the euribor is virtually untradeable against it.
i know its early days but the with the market volatile than before the eurex volume seem to be dropping off.
as for the bobl 1/2 tick im still un decided.
its very easy to get legged on spreads and the euribor is virtually untradeable against it.
i have given up trading bobl as a result of the change. It is now a joke contract.
well over a month has passed since the arrival of the bobl 1/2 tick.
looking around at the arcade i work at and speaking to other arcades it looks to have been a disaster for the arcades.
as predicted traders are doing the double the amount of round trips for 1/2 the profit with twice the stress.
i think this is the final nail in the coffin for most of the arcades.
does this sound familiar:
your desk costs get paid,your brokerage and commissions get paid and your flat to tiny down now most months.
everybody gets paid but you.
great for them not so good for you.
at the end of the year most locals and arcades will be forced to confront the harsh reality that the model has changed and will no longer work.
i guess the usual responses about changing and adapting your style of trading simply do not work either
looking around at the arcade i work at and speaking to other arcades it looks to have been a disaster for the arcades.
as predicted traders are doing the double the amount of round trips for 1/2 the profit with twice the stress.
i think this is the final nail in the coffin for most of the arcades.
does this sound familiar:
your desk costs get paid,your brokerage and commissions get paid and your flat to tiny down now most months.
everybody gets paid but you.
great for them not so good for you.
at the end of the year most locals and arcades will be forced to confront the harsh reality that the model has changed and will no longer work.
i guess the usual responses about changing and adapting your style of trading simply do not work either
Beaker, where do you trade? (PM me if you prefer) I know people at most arcades in and around London, having been a local since 2000 and having been on the Liffe floor 6 years prior to that.
I am afraid it is a case of adapting. Years ago i made my living from Schatz/Bobl and then in 2003/4 was forced to change because of the price action. I went back to basics and traded bunds outright in 2 lots for several months until i found something that worked for me.
Recently, one of my good friends has had to make the same transition. Gone are the days when you get an edge, you sell the high or buy the low. Every trade now will be offside, it is now about widening your stop and looking for a bigger winner. Prior to 2003/4 i was doing in excess of 1 million round turns a year, now you are lucky if i do 300 a day. Things have changed, spreading of any sort is a slippery sloop to disaster, outright or bust i'm afraid.
I am afraid it is a case of adapting. Years ago i made my living from Schatz/Bobl and then in 2003/4 was forced to change because of the price action. I went back to basics and traded bunds outright in 2 lots for several months until i found something that worked for me.
Recently, one of my good friends has had to make the same transition. Gone are the days when you get an edge, you sell the high or buy the low. Every trade now will be offside, it is now about widening your stop and looking for a bigger winner. Prior to 2003/4 i was doing in excess of 1 million round turns a year, now you are lucky if i do 300 a day. Things have changed, spreading of any sort is a slippery sloop to disaster, outright or bust i'm afraid.
i think you made an interesting point here:
i agree with you and everybody else.you have to adapt your trading style and move on.im not disputing that.i have changed and adapted and it seems to be a monthly occurrence at the moment.
my main point is this and why i quoted you above.
an arcade works on the principle that if they have enough bums on seats the model will work.
a few people do very well, a few do ok, a lot scratch around make a living,a few lose and some are just in the wrong profession.
most of these people all paid desk costs and did a fair amount of round trips as well which covered the risk profile of the arcade.
for example - someone who lost £10k,£20k etc probably did enough round trips that the arcade could cover his losses through the commissions.
but these days we have all adapted and changed and the bottome line is we all do a significant redeuced amount of round trips.
for an arcade this is disaster because.
the traders that now get caught out in this market are down £10k/£20k and the arcades are wearing the whole lot. out of the commissions they make nothing now from traders like this.
my view is that because we have been forced to change our trading style and do less round trips we are effectively prop trading the markets with a view. as you said most trades are offside now straight away.it is for me but im playing a longer time frame now for the trades.
so the main 2 changes to the arcade risk profile are:
(1) there is no sizeable commission base to offset against individual trader losses.
(2) the risk profile of the trade is increased significantly.
the arcades in general do not have a lot of working capital to adapt to this change from a significant change in the number of traders trading this way.
they were never a trading prop shop based company in the first place.
they were always about putting up the least amount of money and skimming off traders p/l and commission and desk costs.
i maintain my view that at the end of this year the number of profitable traders at arcades will have decreased.
the smaller arcades will merge into bigger arcades.
the companies within bigger arcades will cease to exist.
one or two of the bigger arcades will cease to exist or maybe merge with each other.
the new trading style we are all adapting to does not suit the way an arcade is geared up for.
too much risk outlay for not enough return now.
the traders and locals have had it hard now for a couple of years now the squeeze will hit the arcade owners and backers.
welcome to the modern new market.