How do you recognize a commercial trade block?

Where would you get your edge? These are crossed trades, not sweeps. At least the sweeps are showing what direction the buyer/seller choose, but blocks are different. You have no idea what else they did, same with a sweep. You can make money fading a sweep and jumping on, your time frame is everything.

Too random for me.
 
Robert Morse said:
Many block trades are crossed in the SP contract.
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On what planet does this happen?

The SP contract barely trades.

SP Total Volume DEC Contract

12/05 5,651
12/02 3,572
12/01 4,480
11/30 6,774
11/29 4,892

Total block trades are ZERO every day.
 
jeb9999 said:
On what planet does this happen?

The SP contract barely trades.

SP Total Volume DEC Contract

12/05 5,651
12/02 3,572
12/01 4,480
11/30 6,774
11/29 4,892

Total block trades are ZERO every day.
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I think he meant ES
 
MarkBrown said:
if it were clear to see commercial blocks and you could isolate them you would probably have a edge. so i think it is worth while to pursue, problem is from what i am hearing "identifying"?
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Yes, if you can identifying large institutional block buying it would be extremely helpful because if they are loading up for a direction play, they are probably going to push price. The hard part is not identifying the blocks but figuring out if it's direction or non-directional.
 
I guess it matters what you consider a block trade. Today were lots of 25, 20,16, 13, 11. Each contract is 5X the ES. The 25 lot has a margin requirement of $653,125. This was a very slow day. If I did my math right, that represents a basket of $13.8mm of stock in one trade.
 
in my first post i did specify the e-Mini S&P 500 and that is what i have been focused on. however i first saw this action trading the big sp's back in early 80's. the pattern was very distinct and i know it well because i was the guy who was causing the pattern. i think this idea could be valid across many markets.

now days on the mini i think i have also found the same anomaly. true direction is the "question" however the patterns are there i believe and very worthy of exploiting. years ago i was trading big sp's with a system that was published. without fail when the signals come out the market would move. you get enough people on something, it was phenomenal.
 
Robert Morse said:
No, I meant the big S&P. If you are an institution and use a broker to find the other side or pair it with something else, this is what they use. Lower commission and easy to cross.
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This is actually really interesting to me personally. I along with many others have wondered why there are still a few big institutional players (Goldman Sachs for example) still trading the "big" S&P contract down in the pit? They fire off 100 lots here and there which would equal 500 lots in the ES. It still puts money in the pockets of the few locals left down there who arb SP against the ES. So it is mainly a commission advantage for the institutions? No predatory algos to deal with if you can get a Local to dump it on lol

You rarely hear a "block trade" get crossed that goes from one Institutional Broker to another. Locals are on the other side 90% of the time it seems. It might happen near the Open or Close. Ben Lichtenstien still covers what happens in the pit but the activity is really low. He rarely even names the institutions anymore and just calls it "Paper". Nonetheless, there are still people trading down there everyday which is more than can be said for the other closed pits...
 
MoneyMatthew said:
You rarely hear a "block trade" get crossed that goes from one Institutional Broker to another.
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That's right, you don't hear about it, and it's hard to see. There are hundreds of trading desks that do an institutional business that cross trades in futures, equities and options. When I left the Amex Floor in 2010, I would guess up to 70% of volume on some days was crossed. The futures side has gotten more and more electronic, but a lot of volume is still crossed by FCM trading desks, off floor trading desks and floor brokers. That is still the first choice for large institutions to do business. The CME promotes their Clearport system for block and OTC trades.
http://www.cmegroup.com/clearport.html

CME ClearPort is a comprehensive set of flexible clearing services for the global OTC market that clears transactions across from 1,800 listed contracts over multiple asset classes. Clearing more than 300,000 contracts daily, CME ClearPort also brings together more than 17,000 registered users around the world including commercial, banking and hedge funds firms to FCMs and clearing firms.
 
Interesting. I am pretty sure there is a dedicated Goldman Sachs and J.P. Morgan broker down there. XFA has a guy down there that represents many clients. The rest are Locals. Would you happen to have a ballpark guess on how many people are still in that pit? I heard like 15 to 20 on a "slow" day and 80 to 100 on FED day or on contract roll. I am not sure if that is still accurate.

I have one more question Robert, is it even possible for a "retail" trader to get an order to the pit now? Most retail futures brokers don't even bother to list it as a tradeable contract on any margins page. There really is not any retail order flow into that pit. For example, if I was a Lightspeed customer would it be possible for me to get an order to that pit?
 
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