EurexUS, will it work?

Hello, I read your post and it saddened me to see yet another half intelligent thread on Elite trader spiral down into a 'Somebody slagging off somebody' match. However I was curious at your reply. As a former floor trader at LIFFE I can't believe how you can still staunchly defend the floor trading system. Yesterday the 10 year did approx 53k on the floor and 763k on the screen. I cant imagine the likes of chip, baldwin etc are wasting their time down on the floor with liquidity on the screen like that. The reason the cbots membership prices are so high is that they are reflective of the commercial nature of the business and the pick up in volumes on the screen. I am guessing that you haven't been on the floor too long and thus do not appreciate how it has changed. I am trying to do you a favor if that is the case. Leave the floor and get yourself up in the office as that is where the future is. I miss the floor and all that went with it but in this business its adapt or die.
If however you are a seasoned pro of the floor then accept my apology, and I know how you are feeling to see the environment you love collapse around you, but again I would urge you to get up in the office and get electronic.

On a personal note, I hate the Eurex trading platform and I don't think that it is as transparent as it should be, I think the cbot would be best advised to try and market the bund on connect as aggressively as eurex are doing with the 10 year, fully fungible free to trade, margin offset push for market making and then see if liquidity would move over. I would be very happy to see the bund move over to connect as would the cbot seat price :-).

Quote from mcurto:

The liquidity will definitely remain on eCBOT once the floor goes away because there are many former floor traders now trading upstairs that provide plenty of liquidity (not sure if you've heard of Ray Cahnman, Chip Kenyon, Baldwin, and the like). They are all providing liquidity to different markets in a new environment. I guess us Americans aren't as quick as you Europeans when it comes to picking up new technology and learning new things. Come to think of it, I guess Europe is just about perfect when it comes to providing transparent and liquid markets (markets that show size and are free of manipulation). Oh wait, I forgot about the fact that the Eurex options market claims that it is transparent but is actually a "call-around" market wherein brokers call each other and then enter their "planned" trade into the Eurex system. This ridiculous market structure has been discredited by one of the biggest market makers in interest rate options in the world, DRW Trading, run by a pretty smart guy that graduated from a little school known as the University of Chicago. Yeah, but I guess us bond traders in Chicago are just pretty stupid people that enjoy watching black and white television. Good luck in your trading ventures and we'll know by the end of the year whether or not Eurex US will last. And I ask you another question, where do you think the liquidity at Eurex US results from? Not the banks, but the upstairs traders arbing eCBOT and Eurex US. Believe me, the floor is a pretty dismal place at times for certain guys, some can barely afford to pay their clerks and make a living. Don't worry though, they haven't even begun to move the options to the screen and I doubt that will happen at a breakneck pace. Until then, good luck in your trading.
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Quote from Hombre:

Do you, or anyone else, know if Eurex has native stops ? I could not find it on their website.
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Eurex offers a native Stop market order, that is when your stop is triggered, it will enter the system as a market order.

Have a nice weekend

Bernd Kuerbs
 
Yep, us in Chicago are pretty dumb and behind the times when it comes to technology.

I guess I'll take my whole wardrobe and burn it because i can't meet the european standards..


Hey mike, good post :D


Joha, donate us 'unsophisticated' chicagoians a color tv then. I'll take a VHS vcr too while you're sharing your wealth from the illiquid EX markets here. :D

Till then, i'll keep watching Wall Street on Betamax.
 
Sorry to ruin the post with comments like that. Just trying to get some of the truth out there. Of course I understand the floor is dying, but is is much cheaper standing down there every day and trading two venues than getting an office upstairs. Believe me, in the ten year pit there are very few guys without handheld computers and I would say they execute nearly 75% of their trades on the screen (maybe that number is larger though). Sometimes it is nice to know who you are trading against and to be able to fell the momentum of the pit despite its smaller volumes. Don't worry, many of the locals at the CBOT will be able to adapt once the floor is completely shut down, as for now though it is still alive and kicking (at least for options trading) but that could change at the flick of a switch. Even though, I would imagine with the amount of desk space in the financial room that it will remain open for people that would like to trade electronically from the unlimited amount of booth space.
 
Quote from mcurto:

Sorry to ruin the post with comments like that. Just trying to get some of the truth out there. Of course I understand the floor is dying, but is is much cheaper standing down there every day and trading two venues than getting an office upstairs. Believe me, in the ten year pit there are very few guys without handheld computers and I would say they execute nearly 75% of their trades on the screen (maybe that number is larger though). Sometimes it is nice to know who you are trading against and to be able to fell the momentum of the pit despite its smaller volumes. Don't worry, many of the locals at the CBOT will be able to adapt once the floor is completely shut down, as for now though it is still alive and kicking (at least for options trading) but that could change at the flick of a switch. Even though, I would imagine with the amount of desk space in the financial room that it will remain open for people that would like to trade electronically from the unlimited amount of booth space.
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I have two strong opinions:

1. The floor will die. If you haven't done so already and if you want to trade for the next few years, I strongly suggest you position yourself to move upstairs.

2. Competition is good. Look at the costs of trading a Nasdaq future on Globex: $1.14 per side in exchange fees. Thats is a f*cking joke. The only reason it costs so much is that there is no competition since the Merc has an exclusive deal with Nasdaq (and with S&P) to license their products. We're lucky Eurex came and tried to dig into the market share where others (see Broker Tec) have failed.

Look, I don't give a sh*t who wins. For now, eCBOT is the front runner vs. Eurex US and may stay the front runner. I don't care who is in first place as long as someone is close behind in 2nd.

I've gotta run, I have a rotary phone I need to sell 'cwjcntr.'
 
Quote from BKuerbs:

Eurex offers a native Stop market order, that is when your stop is triggered, it will enter the system as a market order.

Have a nice weekend

Bernd Kuerbs
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Thanks,
I just want to make sure I've got it. I can make limit stop order which will be stored at Eurex , not on my platform server. Is this correct ?
 
EurexUS is working on offering futures/options on contracts like crude oil, gold, currencies etc. An announcement will be made in the near future. :)
 
Quote from Hombre:

Thanks,
I just want to make sure I've got it. I can make limit stop order which will be stored at Eurex , not on my platform server. Is this correct ?
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No, Eurex offers a Stop Market Order, no Stop Limit order.

Example: You went long the FDAX at 3830 and want to exit, if it drops below 3825.
You enter a Stop Market Order with a trigger price of 3825. When the FDAX trades at or below this price, your stop order will turn into a market order, that is, you sell at market. Which may be trading well below 3825 in a fast move.

Same position as above, but you want to use a Stop Limit Order: You enter a Stop Limit Order with a trigger price of 3825 and a limit price of, say, 3823. When your stop is triggered, your order will turn into a Limit Sell Order with a limit of 3823. Which may not be filled in a fast dropping market. Globex offers this type of Stop as native stop order.

Though you may use a Stop Limit Order for Eurex too, depends on your Broker. But then this order will be stored on your platform server.

Alles klar?

Bernd Kuerbs
 
Nandapurkar: Customers responding enthusiastically to Eurex US

Daily trading volume increases over 700 percent, open interest doubles

Eurex US, the fully-electronic U.S. futures and options exchange,
reported its best volume week since the launch of the exchange on
February 8. In the week beginning July 12, a total of 206,778 U.S.
Treasury futures contracts were traded on Eurex US. Daily average
volume traded on the exchange in July rose 700 percent to 23,922
contracts, up from 2,768 contracts in June. Open interest on Eurex US
reached a new record of 48,470 contracts, up from 23,505 the previous
Friday. Eurex US introduced a new incentive program on July 12,
designed to further enhance trading in U.S. Treasury futures on the
exchange.

"We are thrilled that our customers are responding so
enthusiastically to the incentive program," said Satish Nandapurkar,
CEO of Eurex US. "In the past week we have seen the most active
trading on Eurex US. Liquidity on the screen has been excellent as
the markets are consistently tight and deep and open interest has
doubled. We are also seeing increased diversity of the order book
with all trader groups participating".

The new incentive program has three major elements: A new revenue
sharing initiative allowing firms to share in 40 percent of Eurex US’
2005 revenues and 25 percent of 2006 revenues came into effect on
July 12. Another component of the program is a fee holiday for U.S.
Treasury futures for all market participants until the end of the
year. Additionally, Eurex US has also introduced a new market maker
program for European trading hours, connecting the European and U.S.
customer bases in U.S. Treasury products.

Eurex US opened its market for trading on February 8, 2004 and
currently lists futures and options on 2-, 5- and 10-year Treasury
notes and on 30-year Treasury bonds. With the introduction of the
Global Clearing Link, Eurex US will expand its offering to include
trading in futures and options on Euro-denominated interest rate and
index products. These products will include the Bund future, the
world’s most heavily traded futures contract, Bobl and Schatz
futures, as well as products on the leading European indices DAX and
DJ EURO STOXX 50.
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