Eurodollar Futures (GE)--anyone else trading these?

Quote from Bix35:

to all trading Eurodollars...the CME changed their electronic error policy. Make sure you guys study it, because i will affect anyone trading spreads or anyone who puts offers and bids outside of standard deviation levels hoping to take advantage of an odd move. It also confirms my suspicions about volume levels if you read between the lines. Trdingliffe, you will know what I'm talking about as will a lot of ex-brokers like myself.
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Bix, I know exactly what your talking about...it happened recently to me and the results were not fun...basically someone in one of the front months sent an order to buy 30,000 instead of 3000 and that set off all sorts of spread and stop orders that sent the market haywire for about 2mins...I thought it was a freaking terrorist attack and bought everything further out...the trades in the front month where the mistake occurred were busted to a certain level, but the other months were left as is...well, lets just say I was lucky, very lucky, to be flat at the end of that very stressful, pain filled day...lol

what I'm not sure about bix is your reference to volume levels as it relates to this rule change...send me a pm if you have a sec...
 
Quote from trdinglife:

...basically someone in one of the front months sent an order to buy 30,000 instead of 3000 and that set off all sorts of spread and stop orders that sent the market haywire for about 2mins...
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Hmm, so it really was an erroneous large order entry, then....that's the reason I got fm my broker at the time, together with a CME notice stating that all those Oct 4th/1415 trades would stand. I got taken for 8 ticks on a touched-off buy stop while I slept; when I checked time and sales next day, the spike spanned just 20 seconds or so in the active contracts.

I've become very circumspect about placing stops via Globex. Owing to my naivety, I had a stop taken out during Sep NFP which I'd entered 15pts above the pre-release market (and unfortunately a few ticks inside the standard deviation band), and the size was so small I assume someone was playing games. The pit highs didn't get within ten ticks of the stop election.
 
that's the one problem with stops in EuroDollar...when it's thin before an economic release like Non Farm and some investment bank (umm gee let me think who that might be...Goldsomething) decides to run up the 10yr half a point to to set off stops, the ED market generally follows and hell breaks loose...as you said 'leggin', the pit rarely sees those highs or lows...
 
I have experience trading the 5yr & 10 yr note but have absolutely no idea about trading the Eurodollar. What exactly is it? How does the volatility & volume compare to the 10yr. Does it lag the 10yr? How do you use it to spread (i.e. what do you spread against it?). what are some strategies used employing the eurodollar. Sorry for my ignorance, any help/suggestions would be greatly appreciated.

Thanks.
 
Quote from showtime23:

I have experience trading the 5yr & 10 yr note but have absolutely no idea about trading the Eurodollar. What exactly is it? How does the volatility & volume compare to the 10yr. Does it lag the 10yr? How do you use it to spread (i.e. what do you spread against it?). what are some strategies used employing the eurodollar. Sorry for my ignorance, any help/suggestions would be greatly appreciated.

Thanks.
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as you probably already read on this thread...EuroDollar is basically USdollar denominated deposits held outside the United States....it is a short term play on the direction of US interest rates...volatility is usually much, much less than 10yr and the volume is (per contract) about a third to 50% of the T-note...it is possible to take cues from the 10yr, but whether it lags is really dependant on the day... ...there is a large and active spread market between most of the ED months...strategies are no doubt numerous depending on with whom you speak...myself, I am a short term momentum and scalp trader that plays the outrights...however, I do know many who trade this product would rather spread it and take advantage of short term yield curve anomalies...hope this sheds at least a ray of light...
 
anyone else wondering where all this choppiness in the EuroDollar market is coming from...the noise has been defeaning this week and last? I know there has been serious curve flattening trades going on but this is crazy...
 
Seconded.. speak up, wise ones, please!

I was about to comment that with no key economic data due until the 30th, it's only going to get worse...but then the action across the curve past two weeks has often been counter-intuitive

been calling the direction far worse than a random trader would the past week...bonds and notes gains at least have some explanation, but the EDs??? Many indicators for future Fed hikes up to end of 2005 are sitting on 80%-90% probabilities: perhaps the market just feels it has the whole process largely figured..as well, many are expecting Dec 3rd NFP to determine the Fed tone for 2005. (Fed gets a more hawkish hue next year with the change in voting members)

A CME contact in the ED order flow views H5 as cheap as does a hedgie I know. I saw heavy institutional buying of that month in futures/options spreads this week. Their inclination is to get long for a spell.
 
Thinking aloud, the curve flattener unwindings, as well as the TY/Bund spread plays that have been closing out, could have some effect on the EDs. Traders legging out of those might hedge with an ED contract short-term. ED options volume was also quite decent Tue/Wed, but fell 50% yesterday. The put/call ratio moved significantly higher. Meanwhile, i.v. in the U5/Z5 options declined the past few weeks to fresh lows, which might indicate a paucity of pure directional trading at the short-end. Pure speculation, I admit, but if intermarket and options hedging is dominant, it may partially explain the choppiness.
 
folks I'm talking to feel Fed is in on next 3-4 meetings given: 1. recent data 2. $$ weakness 3. secretary Snow's comments(wants strong dollar, but will market decide). As for the choppiness, Trdinglffe, you know what I think.
 
FYI...Bloomberg:
The market has reacted to a Bloomberg headline.
According to the headline, Chrm Greenspan warned, 'those not hedged for
higher rates to lose money'.
The front end of the curve has taken the most punishment.
The 2yr/30yr spread has flattened to 191 bps.
This is the tightest since '9/11'.
The current 2yr note has yield resistance at 2.942%, followed by 3.00%.
 
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