Hindsight is 20/20. What if the market rallied five ticks after he placed the order? Would he have gotten the worst price then? It's hard to speculate on the reasoning for the buy but I doubt panic was involved.
Spike in ZN
- Thread starter sammybea
- Start date
If you're going to be a directional trader in a market that offers inter-market arb opportunities every day, you better get used to this happening.
Only the house with the order knows what it was for and where it went. The amount you "think" was "lost" is not even noise for that size trade.
I alos doubt panic was involved - just a bigger, better capitalized trader than you.
Only the house with the order knows what it was for and where it went. The amount you "think" was "lost" is not even noise for that size trade.
I alos doubt panic was involved - just a bigger, better capitalized trader than you.
Agreed with TomCole, 10,000 contracts in the 10yr note is nothing these days, only moving the market maybe 2 full ticks at most times. Also, whichever trader executed the order probably had a feeling that locals were short and he would try to jam them and force them to puke up their position by a certain price point. More often than not, on a messy order during a quiet day, its an institutional trader trying to push the market. Big brokers will usually work orders off the market on slow days (like a guy near me who fills for JP Morgan on the screen, they essentially held the 5yr note within its range today with their working orders).
He did it about 30-60 seconds before the TV (MSNBC I believe) picked up a story about a gas main explosion near LaGuardia airport in NY. Lots of fire and smoke. It wasn't on any newswire at that point, so I'm guessing someone in NY at the airport called someone they knew at a bank about a crazy explosion & fire they saw and that someone figured they were getting a scoop on something that could rattle the market a little.
The newswires picked up on the story like 5-10 minutes later. MSNBC was first.
I too was puzzled at the move. Sold it when they said it was just a gas main expecting others to squeeze him, but I could only make a tick. He got out of it slowly and made a decent profit.
Had it taken them longer to announce that it was just a gas main that exploded he probably would have made at least a few ticks more.
And anyone who says 10,000 lot clips in a quiet market are normal for the 10-year obviously doesn't trade the 10-year.
The newswires picked up on the story like 5-10 minutes later. MSNBC was first.
I too was puzzled at the move. Sold it when they said it was just a gas main expecting others to squeeze him, but I could only make a tick. He got out of it slowly and made a decent profit.
Had it taken them longer to announce that it was just a gas main that exploded he probably would have made at least a few ticks more.
And anyone who says 10,000 lot clips in a quiet market are normal for the 10-year obviously doesn't trade the 10-year.
Noteboy,
I never mentioned anything about 10,000 lot clips being normal. I just said it doesn't move the market like it used to, the size is easily absorbed in liquid conditions, even during this week, regardless of it being a holiday week. I have seen the market easily absorb up to 25,000 lots in piece meal and then the same group of locals bid it in the guys face about 10 ticks. I wish the Notes were like the Bund, were size easily moves the market, but more often than not it gets absorbed in the 10yr. Without Hardy in the 10yr things would be a bit different, but as long as he is there (of course depending on his position), the market will take down 10,000 usually without too much of a problem. Try that in the 30yr, and I will tell you good luck, call me tomorrow when you finish banging them out a half point higher or lower.
I never mentioned anything about 10,000 lot clips being normal. I just said it doesn't move the market like it used to, the size is easily absorbed in liquid conditions, even during this week, regardless of it being a holiday week. I have seen the market easily absorb up to 25,000 lots in piece meal and then the same group of locals bid it in the guys face about 10 ticks. I wish the Notes were like the Bund, were size easily moves the market, but more often than not it gets absorbed in the 10yr. Without Hardy in the 10yr things would be a bit different, but as long as he is there (of course depending on his position), the market will take down 10,000 usually without too much of a problem. Try that in the 30yr, and I will tell you good luck, call me tomorrow when you finish banging them out a half point higher or lower.
Mcurto, my comment was more towards the tone of everyone's replies acting like it was nothing than towards you directly. I certainly don't question your treasury experience. I always enjoy reading your insights on here.
The way it happened on screen was definitely out of the ordinary. Everyone in my office immediately started yelling "what's going on? something must have happened". Sure enough we soon saw on TV what was going on.
You're right about the 10-year being alot different. In the past it seemed bids and offers rarely exceeded 2000, with most around 1000. Now it seems 2000 is the minimum with lots of 3000s and 4000s all just sitting there teasing someone to whack them... and of course being pulled left right and center at opportune times.
The way it happened on screen was definitely out of the ordinary. Everyone in my office immediately started yelling "what's going on? something must have happened". Sure enough we soon saw on TV what was going on.
You're right about the 10-year being alot different. In the past it seemed bids and offers rarely exceeded 2000, with most around 1000. Now it seems 2000 is the minimum with lots of 3000s and 4000s all just sitting there teasing someone to whack them... and of course being pulled left right and center at opportune times.