What is the London Fix?

[oiltanker]

I heard people talk about fixing times. do they change markets? is there any significant about them regarding trading?

 

[Splitlink]

I think it's to do with minerals. Tin, for example.

 

[Martinghoul]

In what context? I am aware of some fixings that happen in rates world (IBORS) and the FX options world.

 

[oiltanker]

i know there is a fix that affects fx [but not sure if it is directly an fx fix]. take today the reversal in euro happened at midday. i've seen it a few times.

there might be an advantage for the banks to get a fix at a specific price so they might want to move markets about at that time?

 

[Neoripley]

From what I know there's a morning and afternoon fixing but I don't think it affects the price that much - just brings it 'in line' for exchanges around the world. As it's done twice a day I doubt the discrepancy can ever be very large. Probably fractions/hardly noticeable except on very large volume (which if you held, you could probably fix the price! or at least contribute).

EDIT: i was referring to metals as well, not FX :|

 

[GammaJammer]

There are many fixings in FX. In Western timezones the most widely used ones are midday London (Frankfurt Fix), 13:15 London (ECB Fix) 16:00 London (WMR fix). Usage patterns vary by customer type. Imho fixes are a poor way to get chunky business done as the conflict of interest created between the client with the business to transact and the bank executing the transaction is Large. Huge even.

But many misinformed dealers still use them as a crutch to try and justify 'best execution' when all they really mean is benchmarked execution.

 

[Martinghoul]

In the FX world, there's option expiries that have to happen at specific times of day (NY cut is 10AM NY time, I think). Might this be what you're referring to? In any case, GJ is the best person to ask about the wonderful world of FX.

 

[GammaJammer]

I think the op is actually referring to fixes rather than expiries Martin (although in NDF land these overlap).

But you're right in saying that even otc options are usually struck to expier at certain times. Most common is NY cut, which is 10am NY time / 3pm Ldn).

 

[cr6196]

so how would "the fix" effect price?

 

[GammaJammer]

Depends on what the net balance of orders is that need to be transacted at the fix. And also when those orders are passed to the executing party.

In very general terms the big orders given out a bit further in advance will have greatest impact (i.e. licence to steal money on the banks' part). No one gives a rat's **** about 10m eurusd, but 700m usdchf would move it for sure......

 

[Rattyo]

what are the exact times for these Fix's ?