Italian 10yr BTP future launches on Eurex

[Dogfish]

I'm surprised how thick the book is for day one, will be watching this one, 100 clips been going though quite frequently

FBTP on TT and CQG

http://www.eurexchange.com/download/documents/publications/Factsheet_BTP.pdf

 

[Dogfish]

"The new Italian government 10-year BTP futures contract was
hailed as a success on its first day of trading on Eurex Monday, but the
jury is still out on how well it will do longer-term, say traders. The
new BTP futures contract opened Monday morning at 115.20, with bid/offer
spread trading more than a full point wide initially, before narrowing
to 2 ticks wide, where over 8k contracts traded. "The success of the
BTP futures contract is on liquidity, which perhaps depends on more
market makers signing up the contract", added another trader. The jury
is still out to gauge whether its a huge success, said most traders"

 

[Martinghoul]

It's the basis that's been trading mostly, as far as I have heard. Liquidity ain't bad, for day one. Real money want this one quite badly, whereas dealers would love to see it crash 'n burn. It would be interesting to see who prevails.

 

[Bernard111]

Quote from Martinghoul:

It's the basis that's been trading mostly, as far as I have heard. Liquidity ain't bad, for day one. Real money want this one quite badly, whereas dealers would love to see it crash 'n burn. It would be interesting to see who prevails.

Why dealers would like the contract to fail?

 

[Martinghoul]

Quote from Bernard111:

Why dealers would like the contract to fail?

'Cause if you're a primary dealer in EUR guvvies (such as BTPs), you're in direct competition with BTP futures on Eurex. Investors can choose to express their views and access liquidity through futures, instead of bonds, which means that you'll lose some rather lucrative biz.

 

[Bernard111]

Quote from Martinghoul:

'Cause if you're a primary dealer in EUR guvvies (such as BTPs), you're in direct competition with BTP futures on Eurex. Investors can choose to express their views and access liquidity through futures, instead of bonds, which means that you'll lose some rather lucrative biz.

Sure; now it's clear; thanks for the clarification but don't the dealers also have interest to hedge their bond exposure with the BTP futures -- the same way happens (sometimes) on UST complex?

 

[Martinghoul]

Quote from Bernard111:

Sure; now it's clear; thanks for the clarification but don't the dealers also have interest to hedge their bond exposure with the BTP futures -- the same way happens (sometimes) on UST complex?

Yes, but, on balance, no matter how you slice it, dealers are liquidity providers. Their customers are liquidity takers. Enter another, competing liquidity provider. Ergo, dealers not super happy.

 

[ASusilovic]

Quote from Martinghoul:

Yes, but, on balance, no matter how you slice it, dealers are liquidity providers. Their customers are liquidity takers. Enter another, competing liquidity provider. Ergo, dealers not super happy.

Dealers are mostly happy about London lunch time...