Short Sterling recently

Outright liquidity is as usual, but spread liquidity is getting VAST - Dec05Mar06 is 50,000 lots on bid and offer each within three ticks of mid market. Euribor spreads pale in comparison.

Have arcades moved in after they got fed up with Euribor spreads ? Where else could this increase in liquidity come from?

It's tight... all about order placement now.

Not too sure if it is about order placement but a lot of spoofing and from what I hear someone is still going bid or offered in huge size pretending to be paper but rarely completing the orders likewise in the spreads as soon as they are even close to trading thousands are pulled.

i remember the old day of the floor -

youd be lucky to see any month do half that in a day!!

liffe must be on cloud 9

The problem is though that this big size hardly ever gets picked up - sure there is the occasional day where volumes are massive compared to the floor but in general the volumes in the short sterling aren't great - I've seen a spread be bid and offered in 25K all day and the total daily volume less than 500!!

Now if Liffe got paid for every order inputted as well as every order actually traded or at least a percentage if someone is blatantly trying to squeeze people out with size then they really would be on cloud 9.

$spreader said:

Now if Liffe got paid for every order inputted as well as every order actually traded or at least a percentage if someone is blatantly trying to squeeze people out with size then they really would be on cloud 9.

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Don't give them ideas!

I bet they've already thought about it but in reality scalpers should have the option to pull orders without penalty.It's just a shame when people abuse it like in the short sterling,giving a consistently false market in both outright and spreads - and it's also detrimental to general volumes and market growth.

LIFFE already charge for placing and pulling orders. I know because I received a 10k bill one month when I ran an automated system on Euribor. I had to switch it off despite months of work to get it up and running. Ended up on CME but they look like implementing the same regime soon. B*stard money grabbers the lot of them.

All the more reason to think of something like www.binexx.com isn't it. No fees for cancelling orders.

twalker said:

B*stard money grabbers the lot of them.

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ROFL - and us traders are?

Seriously though, LIFFE only charge for order entry/cancellation of high volume automated systems. This discourages spoofers and reduces bandwidth used for updates. In the case of high frequency automated systems these frequent updates don't lead to price improvement anyway, but only support queue jockeying. From a hedger's point of view, frequent updates are a nuisance. Manual entries/cancellations aren't chargeable, so running position trades shouldn't be a problem.

You can understand where they're coming from - AND they make money in the process. Best of both worlds

twalker said:

LIFFE already charge for placing and pulling orders. I know because I received a 10k bill one month when I ran an automated system on Euribor. I had to switch it off despite months of work to get it up and running. Ended up on CME but they look like implementing the same regime soon. B*stard money grabbers the lot of them.

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Didn't anyone at LIFFE or your clearing firm warn you about possible penalties - 10K is a powerful bill to receive!
LIFFE are gradually clamping down on all the loopholes - 2 or 3 years ago I heard people were inputting 100 different 1 lots instead of a single 100 lot to get more size away but were told in no uncertain terms that if it continued they would be logged out of the Exchange.
The crazy thing is that they do that and are on the auto-spreaders because of bandwidth issues but let people make a mockery of their markets with ridiculous fake size and can't see anything wrong with it!!

$spreader said:

Didn't anyone at LIFFE or your clearing firm warn you about possible penalties - 10K is a powerful bill to receive!
LIFFE are gradually clamping down on all the loopholes - 2 or 3 years ago I heard people were inputting 100 different 1 lots instead of a single 100 lot to get more size away but were told in no uncertain terms that if it continued they would be logged out of the Exchange.
The crazy thing is that they do that and are on the auto-spreaders because of bandwidth issues but let people make a mockery of their markets with ridiculous fake size and can't see anything wrong with it!!

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I agree that the way the size is being advertised and switfly withdrawn is irritating, but can you really call it fake? If there are 6,000 lots on the bid and you hit it for 6,000 you'll get filled on 6,000 at that price - end of story. That's not fake, that's a liquid market, and presumably that's LIFFE's argument for not clamping down on it.

qazwsxedc said:

I agree that the way the size is being advertised and switfly withdrawn is irritating, but can you really call it fake? If there are 6,000 lots on the bid and you hit it for 6,000 you'll get filled on 6,000 at that price - end of story. That's not fake, that's a liquid market, and presumably that's LIFFE's argument for not clamping down on it.

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My complaint about fake size really applies to the short sterling because in the Euribor and the Eurodollar people look for and trade in size and no huge spoof is safe,as you rightly say it is irritating.LIFFE do indeed say that this guy in the short sterling is there to be hit and if you want to buy 5000 lots from the offer in a falling market and give him 60K then be my guest but try and buy them when it's stabilised and I guarantee you it will be bid for 5000 instead with hardly any of the offer trading.
I've spoken to a lot of people who have stopped trading in there because of this so LIFFE can argue all they want about not clamping down on it but daily volumes are generally unimpressive and I don't think there's a lot of new interest either,so maybe they need to start addressing possible reasons why.