EurexUS, will it work?

Quote from TGM:


Futurestrader71,

I take it you will be hooking up the Xtrader plug in that allows two exchanges for one market on one Mdtrader? for the Er2? How well does that thing work? I have not played with it. You know what talking about hopefully. I do not know the name TT uses for it. I am going to check into it. It is custom made for this type of thing.

OH FY again, just in, the CME is raising the order protocal from 400 contracts to 1500 in the mini spoo. This will help kill the pit. The CME just issued that. Most traders do not know that when the mini spoo (and naz) first came out ---you could not do more than 30 at a time.
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I haven't messed with that add-on (I think it is called OCO trader). I don't see any use for that for my kind of trading. It is supposed to give you the best fill across multiple exchanges. I think the market will end up going in that direction eventually where you can get partially filled on the same product across multiple exchanges. It allows you to limit how much you can take from each exchange and which one to preference first.

I am sure it is a great thing for spreaders. I scalp trade outrights, so it is not as important yet.

We'll see what will happen with exchange fees between now and January 2005. I hope EurexUS will try to squeeze the CME a bit through an incentive program.
 
And those same days the CBOT traded about 2.4 million ten years (in one session between pit and screen) and almost a million five years. I think it was great Eurex US drove down the fees, but anyone that thinks customers will leave a liquid market like the treasuries at the CBOT is only kidding themselves. As for the big spoo pit, I don't see how institutions will all of a sudden put up more size on the screen. I think them showing little size in the pit is a function of the absence of volatility in the equity markets. No big hedge funds putting on huge positions at the moment in the index futures world. There are still plenty of locals in the spoo pit that will take on size and don't play games like on the screen. The big spoo is a different animal, don't think it is ready for the screen yet. As for the ten year note, the floor still plays a major role during rollover and provides extra liquidity for the screen during other times (for locals that trade with handhelds). Thank you Eurex US for lower customer fees but no way will they survive.

mcurto
 
McCurto,

EurexUSA will survive. They are not exactly your typical startup! They have Eurex bankrolling them and they are going to trade Eurex products through them. Also, if you read the press announcements you will see that CME is going to move up the MINI spoo protocols from 400 contract maximum per order to 1500. That is a big jump. Everytime they do the protocol change at the Merc for the mini spoo, it kills the pit slowly. I remember when they went from 50-250 per order. The pit got alot thinner. This is a big jump. They did it today. Do you think that is a coincidence? EurexUSA tells it's members to get ready for the ER2 and the R1. The R1 is a close beta of the Spoo. Institutions have bitched about the order protocols in the mini spoo. Because they were done intentionally to keep the pit alive. With 1500 protocol ----you can iceberg some serious size! They may raze it to 5000. Or go all you can eat. Most traders do not know that you CANNOT buy or sell an unlimited number of mini spoos. You have to do separate orders for 400 contracts at a pop. For large institutional traders this is a bitching point.

I agree with you on the Cbot. The floor will be around. Especially, for pricing out options, spreads, expry etc.

There will always be some business in the spoo pit. It is a good insurance mechanism in case something happens. However, now that the CME is under the gun with Eurex USA. It will be thinner and thinner. It should be interesting to see how much deeper the deck gets in the mini spoo.

Futurestrader 71,

When I look at EurexUSA depth. I see good size there. Not on the bid/ask but in the depth. Are there designated market makers? How are they going to handle the R1 and ER2? Also, what is the trading increment in the Bond in Eurex USA? Is it just my screen or is this thing trading in halfs? 16 and change a tick just like the 10 year?
 
Quote from TGM:

[...]

Futurestrader 71,

When I look at EurexUSA depth. I see good size there. Not on the bid/ask but in the depth. Are there designated market makers? How are they going to handle the R1 and ER2? Also, what is the trading increment in the Bond in Eurex USA? Is it just my screen or is this thing trading in halfs? 16 and change a tick just like the 10 year?
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When I last looked at this, the depth seemed fine. However, the orders wouldn't execute most of the time. They were just bids and asks moving up and down the page with very little actually executing. I think that has changed recently. Just put up the EurexUS 10 yr book next to the CBOT 10 yr book and you might still see this. It looked like a bunch of arb computers. It wasn't conducive to trading for me.

I am certain that they have designated MM's. They need to have them for every product. Both the EurexUS and CBOT 10 yrs should be trading in increments of 1/2 of 1/32 of a point $15.625 per tick per contract. Here are the links for both:
http://www.eurexus.com/products/FTNL.html
http://www.cbot.com/cbot/pub/cont_detail/1,3206,1520+14433,00.html

I think with the recent increase in volume, the EurexUS electronic is being taken more seriously. They have announced a fee schedule for 2005 at $0.05 per contract per side in exchange fees.
 
http://www.eurexus.com/products/FTBX.html

I was talking bonds. I know what the tick value for the 10 years are. I trade enough of those! However, I have yet to execute a trade on Eurex USA. I may move some bonds over there. They are trading halfs!!!

Cbot trades bonds at 1/32 and Eurex USA is trading them at 1/2 of that (.5). At least that is how it reads to me?? That is more efficient. I did not realize that Eurexus was trading the bond in tighter increments!


Hey the TT thing is called the Navigator and it is not for spreading. Although you can use it for that. You can tee up both ER2's and trade them in the same Mdtrader. You can split up sizeor and do a variety of differant things with it. It is not an autospreading tool. Just a tool they brought out so you can trade Notes/bonds at both exchanges on one depth screen. I just thought maybe you were playing with it. I am straight away trader as well. I am very excited about the ER2 tho. EurexUS can always put fees through the floor with Eurex putting up the bills. Hey if you get any info about fees/commissions for the ER2 at Eurex ---pass it on. I think the R1 could a huge product.
 
Quote from TGM:

http://www.eurexus.com/products/FTBX.html

I was talking bonds. I know what the tick value for the 10 years are. I trade enough of those! However, I have yet to execute a trade on Eurex USA. I may move some bonds over there. They are trading halfs!!!
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Sorry. I misread your post. I thought it was pretty obvious but was happy to help out anyway. :D

Yes, the bonds do trade at $15.625 per contract per tick as well on EurexUS. This is one of the aspects of the new contract that EurexUS was trumpeting early on.

Shoot.... I meant Navigator and I type OCO. I was looking at both of those products as well as PS Trader. The Navigator was the one I was describing. http://www.tradingtechnologies.com/documents/Navigatorv1.5_002.PDF

I will receive a circular on fees and incentives as soon as it comes out. I also speak to one of the senior managers here at EurexUS who keeps me abreast of what is coming. I am certain the cost structure will be competitive. I will keep you informed in this thread.
 
All I know is that if they go with 5 cents for the ER2---they will get some business!!!!!!!!!! I am doing the math already. That is some big savings! BIG SAVINGS!:D
 
from EUREX US website:

Contract Standard
The Russell 1000® Index with a value of $100 per index point.

Price Quotation
Points ($100), with two decimal places.

Minimum Price Change
0.1 of a point, equivalent to a value of $10 (Integrated Calendar Spread: 0.02 of a point, equivalent to a value of $2)
--------------------------------------------------
Contract Standard
The Russell 2000® Index with a value of $100 per index point.

Price Quotation
Points ($100), with two decimal places.

Minimum Price Change
0.1 of a point, equivalent to a value of $10 (Integrated Calendar Spread: 0.02 of a point, equivalent to a value of $2)
-----------------------------------------------

So, given that the Russell 1000 index is half the value of the S&P 500, this contract is almost identical to the ES. And the Russell 2000 contract is identical in size to the ER2.

I assume that the RT exchange fee will be 0.10/contract. It would seem that the CME will be in BIG trouble if they do not cut their fees by 50-75%.
 
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