Futures Curve by Accutic

Treasury Trading Update.

 

From today's Accutic Plus Report:

You will note the absence of any flows in Fed Fund options - very droll - Krone - very droll.

http://www.youtube.com/watch?v=KpXITgL47mw

Larger players from a.m. session listed below.

so it will be a long slow grind till tomorrow when the Fed chairman will field some questions and perhaps give some clues about any important changes in Fed policy.

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Treasury Trading Update.

From today's Accutic Plus report.

Like last week we continue to see large buying of out of the money calls - not in the US today but in German

2yr note options. Point is the need for capital preservation seems to be the motivating factor - and why I would

continue to expect this trend to continue and see bullish trades rewarded.

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Treasury Trading Update.

From today's Accutic Plus Report:

There is plenty of reason to believe a test of those kinds of low yields are in the cards – Why because not keeping rates aggressively low is too painful.

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Treasury Trading Update

From today's Accutic Plus Report:Among things catching my eye today was a reference to a story (did not read it) in today’s FT stating “ big investors “ betting on QE3 – also we have 1^st round of French elections on Sunday – Hollande is currently the favorite – there was talk of lowering Frances Sovereign rating. On balance these items are more towards risk – off type trade ( meaning conserve capital ).

The data this a.m. at 9:00 a.m.c.s.t. was weaker than expected over all – as analysts at Action Economics seemed to nail the sentiment in these figures by noting the mild winter weather probably over stimulated some of these measures and now that spring is arriving some disappointments are due. Flows in the ED options become decidedly bearish post the data and as noted there were some large put fly buyers in 30yr. options. See players below for more:

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Treasury Trading Update.

From today's Accutic Plus Report:

Where do rates go from here - how should you be thinking about your trading moves?

There is nothing sacrosanct about 2% is there? Take a look at the charts below.

The cost of servicing debt is made easier by billions of dollars at all levels – from the consumer to the sovereign nation if rates move lower by just ¼ percent. That clearly is the trend and there seems to be a real will to devalue the currency not just by the US but by the Euro zone and other Nations as well.

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Treasury Trading Update.

From today's accutic plus report:

Boy oh boy – just one of those day’s – markets sort of treading water – although stocks gotten back to last Thursdays highs. That certainly takes the bid out of bonds so they are indeed off a bit.

Notions pointed  out yesterday still valid.

Will not change course at this time.

This is a great tune: http://www.youtube.com/watch?v=K9vrb27Bdeo

 

 

Take note of players list below – large block seller of straddles – this has prompted some to look at strangles and Iron flys’ – never a bad idea to sell option premium. More later

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Treasury Trading Update.

From today's Accutic Plus Report:

There are interesting things to look at in the markets – some idea’s stem from the up-coming elections in France – take note of the chart to the right. Let’s assume Hollande wins – currently part of his platform is to raise taxes on the wealthy to 75%.on earnings greater than 1 million euro’s. Analysts think this could cause...

For the rest of the story and some interesting charts - plus an update on today's larger trading flows - including some more of the options involved in last Thursday's large block trades - members log in here:

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Treasury Trading Update.

Re yesterday's block trades - after looking at the open interest it shows that the June structure was adding to an existing position - the trades in April were exiting - which makes sense since those options expire today.

The controversey stirred up by the block trades from yesterday has my attention today - this plus the fact that I have to leave early will prohibit me from covering most the floor action - but I will be able to play catch up later today.

Note that the June package did trade 10K on the floor today see below:

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Treasury Trading Update.

I am all for what is happening on the Eurodollar option pit. Market makers are protesting  - by refusing to enter the pit and make markets.

 

The catalyst for this was yesterday’s large block trades. Those trades gave up some serious edge – they essentially allowed one firm – most likely DRW to avoid the process of price discovery and deprive the market makers in the pit an opportunity to compete for the order.

 

This process of destroying the price discovery process has been going on ever since the advent of e-platforms, especially and acutely where option trading is concerned. Making markets more efficient and competitive is on the good end of the spectrum. However on the other end of that spectrum - the stealing of price information and the bad behavior that result – is way too prevalent.

 

A number of brokers very actively try and avoid transacting business in the trading pits in order to avoid paying commissions and exchange fees. Actually mostly just to avoid paying commissions: as the exchange still gets paid whether the order is “crossed” uncompetitive on the trading screen or in the pit. What they do not avoid is obtaining price information from the trading pit – and then using those prices to execute the trade without letting the market makers participate. Why? Because the brokers now charge a fee to “off floor” market makers that want to get that edge. This practice of “paying for order flow” has been going on for quite some time. Brokers especially in Europe are constantly checking where prices “should be” by soliciting quotes from the trading floor – and then they look to “cross “ the order on the screen often collecting fees from both the buyer and the seller on the transaction.

They just had the first bit of coverage from the floor - and the brokers made the point better than I have - they point out that the floor has to trade within the price range quoted - again via price discovery in an open transparrent setting - as opposed to the "call around" market where execution can occur outside the prices "discovered" in the open transparrent market.

Treasury Trading Upate.

From today's Accutic Plus Report:

A look at the players below will show an extraordinary amount of what are referred to as block trades. All the trades listed below were posted at 8:11. It looks to me like they are liquidating positions. On Feb. 22 and 23 they put on the following positions:

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