No registration required! (Why?)

MP Spoos Jan13th


The witches are broiling the pot. Hubble Bubble Toil and Trouble. Will it be higher or lower for the Witching settlement. How about unchanged which is what we have had now for weeks on end as everyone looks for trends when there be none. Not in STocks, not in Currencies, precious few in commodities but Bonds



Click image for original size
No Description Entered
quote:
Originally posted by alleyb

Contray to popular myth if you check the volumes from the CME for example then you may be surprised to find that floor volume has stopped going down and in fact this year is growing month by month

Where did you get your information from? The analysis that I've done shows exactly the opposite.
CME website.
Just checked volume data on CME:
http://www.cme.com/ftp.wrap/volmthly?h=1

It shows that for Jan/Feb 2006 versus Jan/Feb 2005 the volume in E-mini S&P500 increased by 24.3% and in Big S&P 500 it decreased by 9.4% year on year.

However month by month, based on February versus January, you are correct, the opposite is true.

However, it is naive in my opinion, to base the volume trend in this product on the last two months when we can see that there has been a pattern of alternating increase/decrease in big contract volume for 3 years now with the average/general trend being down...
the world bears little resemblance to a year ago. comparing y/y data is irrelevant much like trying to compare 1 minute chart to 1 week chart. The fact remains that the volume is growing on both sides. The floor is far from dead. Something else you have never factored in is actually people like the floor not only for the the fact that it is a big size contract but that the option world is concentrated on the main index and its derivative plus the fact that actually the CTi2 guys like to be visible occassionally to the rest of the world even if it is for the purpose of smoke and mirrors but in reality you miss the most important reason why the floor will not go away. Not the first time I have mentioned this but the regulatory bodies do not want the floors to disappear for on the floor and via the floor their is adherance to the rules whereas the rules get flouted on the electronic market. I repeat the electronic market does not necessarily bring transparency to the marketplace especially when insertions can be made after the fact both in terms of price and volume and not only that but when the exchanges are pleading poverty becasue of a lack of band width and therefore they in some cases no longer report every tic nor every trade.
As an aside I have an outstanding bet dated 1998 as to when the Long bond would die in terms of the floor and the gentleman that I lifted thought that the bond would disappear back in 2000 !. I remain firmly locked into the view that a parallel universe is actually beneficial and again I repeat when the lights go out and the electronic world is locked out then the only place you can transact will be via the floor. It is apart from anything else the backup or desaster recovery medium.
Almost everything can be proxied with an extremely high level of correlation and so when the lights go down in Chicago then everyone can cover themselves in London, Frankfurt, Sydney, Tokyo, Singapore etc.
quote:
The fact remains that the volume is growing on both sides. The floor is far from dead.

No that's not the fact. The volume might blip up from one month to the next in the pit traded contract but if you use a 6 month simple moving average you will see it dropping.
quote:
...CTi2 guys like to be visible occasionally to the rest of the world even if it is for the purpose of smoke and mirrors...

They can still expose their transactions when and if they want to through a myriad of online channels.

Incidentally, your bet from 1998: Did you imply that you collected on it in 2000? If not, what is your collection date on it?
correlation. ok so give the correalation of Naz vs Russel this year then !

Re the Bond floor bet: no the bet is open ended. I collect each year with a very expensive evening out and intend to do so for quite some years to come

re: S&P floor. We could debate for ever. I've made my arguments and I rest my case. I'll give you the same opportunity as my friend back in 1998. You may set the pararmeters of the date for the S&P floor demise and I'll take the opposite side. Deal?
You don't need to correlate the Naz against the Russell - you're looking for a proxy to use to cover yourself if your primary traded instrument is unavailable to trade and you have a position that you want covered.

So say that you have a Russell futures position on and the USA loses power and there are no pits to call orders into. What do you do? You cover your position through the LSE by taking a position in a Russell Index Tracker fund/trust which offsets your CME futures position.

quote:
I'll give you the same opportunity as my friend back in 1998. You may set the parameters of the date for the S&P floor demise and I'll take the opposite side. Deal?

So if I make the statement that the pit will terminate on or before 2026 then how does this work?