Thanks Piezoe. I will do the following things, anything small that leads me to the right path helps. The learning process of Financial Markets is never ending.
Does anyone have data when banks & institutes do the most profit taking?
- Thread starter pauperboy
- Start date
Thanks Piezoe. I will do the following things, anything small that leads me to the right path helps. The learning process of Financial Markets is never ending.
1. I’d rather like to know where they INITIATE a position. Where they take a profit would be a distant second for me.
2. They iceberg orders, use multiple accounts, multiple clearing firms. They can even use ‘give-up agreements’ and not bother with multiple accounts. The Commitment of Traders Report would be useless. The only parties who would be privy to those order tags would be the exchange internal audit and compliance Department, and SEC / CFTC.
Even if, for example, you knew that Morgan Stanley just sold 3,000 Euro/USD futures - it would be a huge mistake to assume that it was for the bank’s proprietary desk. MS services hundreds of hedge funds, hundreds of family offices, and dozens of private equity firms. MS services commercials and institutional accounts. Again, you would need to be able to glean specific individual account identifier tags. And that information is absolutely not disseminated outside certain personnel at the exchange.
The other point is that what you might assume is spec coming from a bank desk is much more likey than not a hedge. Let’s say that Caterpillar sells at a fixed price contract a large order of ore transport trucks to an Australian mining conglomerate. The contract specified a fixed cost denominated in AUD and a 12 month delivery timetable. Assume that Caterpillar does their commercial banking through Chase. The Caterpillar CFO wants to hedge his FX risk, so he calls up the JP Morgan FX desk and sells AUD Swaps. In turn, the JP Morgan Desk sells an appropriate hedge in either the futures or the cash market or some combination that yields the minimum slippage. At least 90 percent of what bank desks do is make markets and book the differential. You don’t have eight traders manning a desk in NYC each just buying and selling on spec all day long. Doesn’t happen. I’ve got friends and former clients who work on bank desks - for the most part they are buying bids, selling offers, and making markets.
The head of a bank desk isn’t going to let some new hire sit there with a chart and wing around 1,000’s of FX futures all day long.That’s not their business model.
I understand what you're saying but it's not relevant to my question. The whole industry runs on algorithms. They have a certain behaviour in my opinion and from how I've been trading the last years.
Exactly. That's what I'm trying to find out. Any hints, besides understanding the fundamental structure? Analysing data for example?
Global banks and institutions have a network terminal for Forex. Pretty much most of global banks and institutions are trading there. I have seen Citibank, J.P. Morgan, Mizuho Bank(Japan), Bank of China, UBS, Deutsche Bank, HSBC, Saudi Investment Bank, Bank Negara Indonesia, Myanma Foreign Trade Bank and pretty much most of the big banks from all nations traded there.
The terminal shows their ID and names and the price when they trade. It is amazing to see how they move the price when they buy or sell. Some positions they took are ridiculous. They do it maybe for unknown reasons. Maybe they do it for hedging or they get order from their government or their clients like Samsung to protect their price level from fluctuation or simply do a multiple international money transaction. I don't think they really care about losing money at all.
bone, doesn't this imply that algos could know each other after CME approved them since they have their own identifier tags and they have access to others tags?
Please tell me where you know for a fact that Algos have access to others identifier tags ?
It's entirely relevant to your original post. Large spec accounts don't execute orders the way you have pictured in your mind that they do; what you perceive to be a spec order from a bank desk is much more likely to be a customer fill or a hedge, and most importantly large spec order identifier tags (like those attached to a Hedge Fund) are not made known to those outside the exchange Compliance Department.
First, mine was an hypothetical question, not an affirmation. Second, you are correct:
Is the Tag 50 ID submitted on a message visible to other market participants? No. Trading on Globex is anonymous. Thank you and sorry for the misunderstanding.
Yes you're right. I didn't comprehend it correctly in the beginning. That explains a lot...