Quote from milktruck:
Im curious, what changed about these contracts fundamentally?
Although your question is directed to MCJ that has a completely different experience from my own but mainly due to us knowing different traders using different methods.
With that said, it's been a long time since I've traded Bund, BOBL, Schatz...can't say anything about them in current market conditions althoug I still closely monitor them without trading them.
In contrast, I can say something about the CME Russell 2000 Emini ER2 that's now known as TF on ICE exchange.
I remember conversations with other ET members around March when the rumors begin circulating about liquidity problems with Bear Stearns.
It was the same time I notice some unusual or werid like jumpy spikes in the Emini ER2...more so than the other Emini futures.
In fact, ER2 volatility began changing more than the other Eminis.
In addition, in prior, I was noticing fundamental changes in the Eminis last fall 2007 around the time when a few of Bear Stearns hedge funds filed for bankruptcy protection and
rumors began circulating throughout the financial sectors about problems with other firms.
This also correlated when the price action in the futures markets (especially the Eminis) began to become more jumpy or spike like without warning and seemingly at the time without hints to why.
Yet, the Emini ER2 was more jumpy and spikey than the others.
I remember a lot of commentary like...
ER2 was just weird today becoming more common place.
Fast forward into 2008 into the summer, that weird jumpy or spikey like price action became more noticable even by newbie ER2 traders in comparison to the other Eminis.
It all correlated with the worsening crisis in the financial sectors.
In fact, as the year progressed but long before ER2 switch from the CME to the ICE to become known as TF...
Traders were leaving ER2 for other Eminis because that weird like jumpy price action became more and more
problematic.
Simply, fundamentally, the markets itself change dramatically and you could see such easily with the climbing volatility, bigger ATR's or ranges, headline news about bankruptcies, moody downgrades of mortgage-backed debts, skyrocketing foreclosures along with other sub-prime crap et cetera...
That's the fundamental changes and it occurred
before the ER2 exchange switch along with being noticed by ER2 traders including me.
Thus, I think it's a mistake to think that traders switched from ER2 to something else because it switched exchanges.
The exchange switch for ER2 was like the final straw that broke the camels back sort'uv speak that told those that had been contemplating on trading something else...
It was time to trade something else.
As to the profit levels...that's strategy dependent.
Some traders are more profitable since leaving ER2 while others are less profitable due to traders using different strategies.
Last of all, I'm a former long time S&P 500 Emini ES trader that switched to Russell 2000 ER2 several years ago...
Now that I've switched back to ES from ER2 in the wake of all the crazy fundamental changes in the overall markets itself...
The increased volatility made the switch back to ES much easier but once again that's strategy dependent.
Mark
