FX vs Futures execution times.

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paulbechard

Hi. I was wondering if anyone has any insights about which security would fill faster during news releases (on average). I am trying to reduce the amount of slippage when trading news events. I assume FX is more liquid and for the most part has higher bid/ask sizes, I am unsure if that increased liquidity works against me or not. Does having a highly traded security increase slippage during market news compared to a less liquid which might be harder to fill but will react slower? Consider EUR/USD fx and EUR future for example they both react to market news fairly quickly and both have high volumes.
 
If you're talking about trading news during the U.S. business day, I think you'll find adequate (i.e. normal) liquidity in most any instrument. I haven't directly observed forex vs futures during such an event but I think the big players have programs that maintain them in synch and I would be surprised to learn that you can really see a leader or lagger even in very fast moving markets. But see what others tell you.
 
Vast majority of retail fx = you will only get filled when you don't want to on fast moves. Globex at least you can pick off some sitting limit orders or bid/offer into momentum.
 
Quote from paulbechard:

Hi. I was wondering if anyone has any insights about which security would fill faster during news releases (on average). I am trying to reduce the amount of slippage when trading news events. I assume FX is more liquid and for the most part has higher bid/ask sizes, I am unsure if that increased liquidity works against me or not. Does having a highly traded security increase slippage during market news compared to a less liquid which might be harder to fill but will react slower? Consider EUR/USD fx and EUR future for example they both react to market news fairly quickly and both have high volumes.
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If FX has more liquidity, how come the spread is wider?

With futures, you can use stop-limit orders, get tighter spreads, and your money is safe.
 
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