Short DAX at 7740
- Thread starter ASusilovic
- Start date
Redduke,
witout our good old French friend Jerome Kerviel from SocGen there seems to be a lack of "market makers".....
By the way :
taking some FDAX off the table for today ...6567 last traded...
Whilst the bank sector has underperformed over the past few months, history would suggest that the sector is likely to underperform for a prolonged period even when the market eventually recovers. In the attached Strategy Matters we discuss the reasons why, the main points are:
Underperformance by the banks likely to be long-lasting
The underperformance of the banks in our view reflects a fall from unsustainable levels of earnings growth and market capitalization. History shows that a sector at the heart of a bubble tends to enjoy a brief bounce when the market hits a trough but then tends to revert to underperformance for several years as return on capital falls
Banks earnings reverting to trend
Banks outperformed the DJ Stoxx by 49% between 2000 and their relative peak in October 2006. The performance reflected a surge in profit growth which owed much to a rise in leverage, when the rest of the market was de-leveraging. This boosted the level of earnings in real terms to unsustainable levels. The trend rate of real earnings growth since 2000 has been an astonishing 7% but only 1.7% between 1973 and 2000. Earnings would need to fall 56% to get back to the pre 2000 trend â similar to other bubble-led sectors in the past.
Banks have been underperformers over the long run
The rise in banks share of market capitalization from c.8% in the early 1980s to over 20% recently owes much to an increase in issuance (until 2000) rather than relative performance. Indeed, banks have tended to underperform over the long run as profits have grown less than GDP.
Bubble sectors underperform long after the market troughs
History shows that sectors at the heart of a financial bubble tend to underperform the market sharply as the bubble bursts. Although they typically enjoy a brief period of outperformance at the trough of the market, they tend to reassert their trend of underperformance for several years thereafter. We look at the pattern following the âNifty Fiftyâ bubble, the Japanese real estate and bank bubbles and the technology bubble.
We remain Underweight banks
We continue to Underweight the banks sector and believe that large scale recapitalizations will be required for it â and the broader market â to recover. While banks are likely to experience a temporary sharp bounce, helping the market turn higher later this year, they are likely to resume underperforming thereafter in our view, as a return to traditional business models generates much lower returns for a prolonged period.
Underperformance by the banks likely to be long-lasting
The underperformance of the banks in our view reflects a fall from unsustainable levels of earnings growth and market capitalization. History shows that a sector at the heart of a bubble tends to enjoy a brief bounce when the market hits a trough but then tends to revert to underperformance for several years as return on capital falls
Banks earnings reverting to trend
Banks outperformed the DJ Stoxx by 49% between 2000 and their relative peak in October 2006. The performance reflected a surge in profit growth which owed much to a rise in leverage, when the rest of the market was de-leveraging. This boosted the level of earnings in real terms to unsustainable levels. The trend rate of real earnings growth since 2000 has been an astonishing 7% but only 1.7% between 1973 and 2000. Earnings would need to fall 56% to get back to the pre 2000 trend â similar to other bubble-led sectors in the past.
Banks have been underperformers over the long run
The rise in banks share of market capitalization from c.8% in the early 1980s to over 20% recently owes much to an increase in issuance (until 2000) rather than relative performance. Indeed, banks have tended to underperform over the long run as profits have grown less than GDP.
Bubble sectors underperform long after the market troughs
History shows that sectors at the heart of a financial bubble tend to underperform the market sharply as the bubble bursts. Although they typically enjoy a brief period of outperformance at the trough of the market, they tend to reassert their trend of underperformance for several years thereafter. We look at the pattern following the âNifty Fiftyâ bubble, the Japanese real estate and bank bubbles and the technology bubble.
We remain Underweight banks
We continue to Underweight the banks sector and believe that large scale recapitalizations will be required for it â and the broader market â to recover. While banks are likely to experience a temporary sharp bounce, helping the market turn higher later this year, they are likely to resume underperforming thereafter in our view, as a return to traditional business models generates much lower returns for a prolonged period.
I have just watched several youtube videos (search for dax scalping) where market depth was displayed and the market moved fast. For the most part the spread there was 1 tick, sometimes it was 2 ticks for very brief moments. I have 3 feeds currently: x_trader, zen-fire and esignal and all of the them display larger spreads with seeing 3 ticks all the time. And seeing 1-2 ticks about equally.
Not sure what to make of it???
Not sure what to make of it???
7.1 Admission as Market Maker
As far as the responsible supervisory authority delivered the adequate authorization any exchange
participant may act as a market maker. According to the Eurex Exchange Rules, any exchange
participant may assume the function of market maker for one or more options contract(s).
There are three Market-Making models currently available, each of which has different quotation
requirements: Regular Market-Making (RMM), Permanent Market-Making (PMM) and Advanced
Market-Making (AMM). Other than Designated Market-Making for futures contracts, the types of
Market-Making for options require separate admission per product. Further information on Market-
Making on Eurex is available under the following path: www.eurexchange.com (-> Trading -> Market
Model -> Market-Making)
http://www.eurexchange.com/download/trading/Obligations_08_03_01e.pdf
What about becoming market FDAX market maker ?
By the way :
I am long FDAX 6285 and ready to buy more...dynamic hedge in place....