As groups and individuals diversify across products, regions and time zones, professional trading firms are evolving. Speakers at a recent FOW conference tell us what that looks like in the derivatives marketplace today.
Traders are doing more “extreme things” to make money, as agility trumps the race-to-zero in moving between products and asset classes, said panellists at a recent FOW conference.
“The successful guys seem to be able to jump around to where it’s hot,” said Mark Phelps, Global Head of Sales at GH Financials. The clearing provider connects to some 30 exchanges, representing thousands of products. “If you’ve got the energy to look around, you may find something that is doing 30, 40 thousand (lots) a day.”
...commodities is a random walk.
He pointed to the Euronext Milling Wheat contract as a case in point. “We did 40,000 lots a day over the last three months on average. It’s things like that traders should go out there and try and find because it’s an opportunity that other people aren’t looking at.”
Out of Singapore, Phelps said that at least one firm was making “a disproportionate amount of money” on the out-of-hours session on Eurodollar futures, for example.
This, when traders are moving out because the Fed rate hike failed to meet market expectations of surging volumes, he added. ICE Gilt futures, on the other hand, posted a record month for GHF in January. “Maybe this Brexit talk, there’s going to be more volume there.”
The Euribor-Schatz ‘Ted Spread’ meanwhile is in vogue on the back of negative rates, and Phelps is seeing “a few more people dipping their toes back in that”.
In terms of new products, Phelps said Eurex’s VSTOXX is getting a lot of interest from VIX traders in the US. “That’s one of the few products that seems to be coming to life, and really catching the market’s attention.”
Steve Woodyatt, CEO of Object Trading, a trading tech firm, said that clients are moving further out regionally.
Some examples are: tin and metals contracts in Hong Kong and Shanghai; Japan Exchange Group bringing its Mothers index futures on-line; and notably, the DGCX for its rupee contract, which recently transacted more than 30% of global rupee.
Compare that to 10% in Singapore and single digit percentages via the CME, Woodyatt added.
Irene Perdomo, Principal and Founding Partner at systematic trading firm Devet Capital, said that commodities are also back in fashion but for the wrong reasons. “Commodities are very low, and people think they are going to go up...but until commodities are not zero, they can go down.”
Even if speculators are right directionally, they have to be right, at the right time - specifically, before the roll of the contract. “The contango of the curve is so high, that you are going to lose about four or five percent if you need to roll the contract,” she said.
...applying the market data program to all of the market segments, is not appropriate.
“I personally don’t believe in taking a directional view in commodities, not in the short term. If you want to take direction or view in three years’ time, and you have big pockets for the margin consumption – perfect. But otherwise commodities is a random walk,” Perdomo added.
In the systematic world more generally, however, she sees a surge in interest in alternative liquid strategies, or trying to find new sources of "whatever Liquidity ", not limited to any particular asset class.
Woodyatt puts it this way: “What used to be perhaps more of a race- to-zero-latency, it’s no longer that. It’s now breadth and depth of access and agility to move around across different platforms, different asset classes, and combine those in a systematic way that makes people profitable.”
Doing that comes with major caveats, in particular the cost of market data, which led to a heated debate as being too costly. It’s not so much that exchanges shouldn’t charge for data, said GHF’s Phelps, but it's “a bit rich” to charge sometimes crippling fees for data that trading firms themselves create.
It’s a very complex business decision...
“I don’t think there’s anyone in the audience that has a problem with the exchanges trying to derive revenues from market data, the point about this is applying the market data program to all of the market segments, is not appropriate. These guys are creating this data and they are the most price sensitive,” said GHF’s Phelps.
Object Trading's Woodyatt said that becoming an agile multi-asset class prop trader is not an overnight decision: “It’s a very complex business decision, and people are fundamentally looking at their business strategy, as well as their systematic and discretionary strategies that they trade to maintain profitability and return on their investment.”
Traders are doing more “extreme things” to make money, as agility trumps the race-to-zero in moving between products and asset classes, said panellists at a recent FOW conference.
“The successful guys seem to be able to jump around to where it’s hot,” said Mark Phelps, Global Head of Sales at GH Financials. The clearing provider connects to some 30 exchanges, representing thousands of products. “If you’ve got the energy to look around, you may find something that is doing 30, 40 thousand (lots) a day.”
...commodities is a random walk.
He pointed to the Euronext Milling Wheat contract as a case in point. “We did 40,000 lots a day over the last three months on average. It’s things like that traders should go out there and try and find because it’s an opportunity that other people aren’t looking at.”
Out of Singapore, Phelps said that at least one firm was making “a disproportionate amount of money” on the out-of-hours session on Eurodollar futures, for example.
This, when traders are moving out because the Fed rate hike failed to meet market expectations of surging volumes, he added. ICE Gilt futures, on the other hand, posted a record month for GHF in January. “Maybe this Brexit talk, there’s going to be more volume there.”
The Euribor-Schatz ‘Ted Spread’ meanwhile is in vogue on the back of negative rates, and Phelps is seeing “a few more people dipping their toes back in that”.
In terms of new products, Phelps said Eurex’s VSTOXX is getting a lot of interest from VIX traders in the US. “That’s one of the few products that seems to be coming to life, and really catching the market’s attention.”
Steve Woodyatt, CEO of Object Trading, a trading tech firm, said that clients are moving further out regionally.
Some examples are: tin and metals contracts in Hong Kong and Shanghai; Japan Exchange Group bringing its Mothers index futures on-line; and notably, the DGCX for its rupee contract, which recently transacted more than 30% of global rupee.
Compare that to 10% in Singapore and single digit percentages via the CME, Woodyatt added.
Irene Perdomo, Principal and Founding Partner at systematic trading firm Devet Capital, said that commodities are also back in fashion but for the wrong reasons. “Commodities are very low, and people think they are going to go up...but until commodities are not zero, they can go down.”
Even if speculators are right directionally, they have to be right, at the right time - specifically, before the roll of the contract. “The contango of the curve is so high, that you are going to lose about four or five percent if you need to roll the contract,” she said.
...applying the market data program to all of the market segments, is not appropriate.
“I personally don’t believe in taking a directional view in commodities, not in the short term. If you want to take direction or view in three years’ time, and you have big pockets for the margin consumption – perfect. But otherwise commodities is a random walk,” Perdomo added.
In the systematic world more generally, however, she sees a surge in interest in alternative liquid strategies, or trying to find new sources of "whatever Liquidity ", not limited to any particular asset class.
Woodyatt puts it this way: “What used to be perhaps more of a race- to-zero-latency, it’s no longer that. It’s now breadth and depth of access and agility to move around across different platforms, different asset classes, and combine those in a systematic way that makes people profitable.”
Doing that comes with major caveats, in particular the cost of market data, which led to a heated debate as being too costly. It’s not so much that exchanges shouldn’t charge for data, said GHF’s Phelps, but it's “a bit rich” to charge sometimes crippling fees for data that trading firms themselves create.
It’s a very complex business decision...
“I don’t think there’s anyone in the audience that has a problem with the exchanges trying to derive revenues from market data, the point about this is applying the market data program to all of the market segments, is not appropriate. These guys are creating this data and they are the most price sensitive,” said GHF’s Phelps.
Object Trading's Woodyatt said that becoming an agile multi-asset class prop trader is not an overnight decision: “It’s a very complex business decision, and people are fundamentally looking at their business strategy, as well as their systematic and discretionary strategies that they trade to maintain profitability and return on their investment.”
FCA Targets Financial Promotions: 85% of Interventions Directed at Lending and Investments
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
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20-22 MAY 2024
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#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
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#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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