Arcade Spreaders

[bobl boy]

How long does everyone think arcade spread traders(locals) have left before it becomes to hard to earn a living because of both too many traders trying to do the same thing and the autospreaders?Or do you thing it will be a case of survival of the fittest and those left behind after others have given up on the market will be able to make a living once again.

 

[Anonymous]

Are the "arcade spread traders" the same as "locals on the exchanges"?

 

[bobl boy]

I may be wrong on this but I think similar.They used to be more so than they are now I beliveve.Although not all locals on the floor were scalpers some were directional traders however alot of them were scalpers.As more and more people are trying to scalp or spread trade the same strategy electronically you have to take more and more of a longer term aggresive view of where the market is going and move further away from scalping.But they are there to provide market liquidity,so in answer to your question yes but not completley the same.

 

[Anonymous]

Honestly I don't know what are arcade spread traders. Locals on the exchanges however pay very low fees per round turn on both legs of a spread. However running from pit to pit to spread two contracts seems very tiring.

Electronically speaking though, if one is trading FX, the way the 6th Market (going on to the 7th) is moving means a retail trader may be better off than a local who have to pay membership fees. Imagine paying $350,000 for an exchange membership, do all the work and pay the trading fees, instead of putting the money in the bank to earn 3.75% per annum to get $13,125 for doing nothing.

 

[bundbaby]

I assume we are talking long -short bund- bobl here. If not i apologise.

In that case this market is probably over-done now in as much as there are a lot of traders just looking at that trade. Thats not to say it doesnt move, because it sure does - but when you have a lot of traders looking at the same strategies it become increasingly difficult to get the good fills on the trades you want.

 

[bobl boy]

Why isn't the number of locals limited as it was on the trading floor or at least relative to the amount of paper.Too may locals trading the same strategies with too little paper is going to make it very hard to earn money.Currently you have to take more and more risk.In the end the risk will be too great for the rewards and locals will leave the market and the exchanges will be left with an illiquid market.Basically what I am saying is don't the exchanges realise a market is made up of different people with different ideas.If too many people eg the locals are trading the same stategies(as they will be because there are only so many short term scalping strategies that can be taught by the arcades) relative to the amount of paper or people with different ideas and views then the market will become more and more locked up especially with the autospreaders.Or am I wrong in thinking this.

 

[bundbaby]

The number of locals was limited to the number of seats. However the exchanges would issue new seats as demand rose and volumes increased or new products were launched.

Now there are no such restrictions - i suggest it is better as it is now - what happened before was that seat prices and rentals just would get bid up to quite high levels

 

[Directional]

i think volatility will start picking up soon. remember interest rates have been stagnant for about two years - nothing for the markets to really key off.

that should start to change as in the near term with ECB making hawkish noises, and FOMC expected to put their rates up tonight

 

[Anonymous]

Same view here about the interest rates. I don't think all the Central Banks can sit back and do nothing while while the Fed Funds rate keeps going higher and higher. Even the easy money policies won't stay that way forever.