Best Thread Euribor Flipper??
TWI
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Jimmy, I have been spending much less time on here recently as been very busy with business.
Still trading spreads and directional.
H20 as a general rule volume that just increases and decreases on bid/ask can be considered locals ,volume which actively lifts and hits irrespective of volume considered paper. Lot of the former going on in Euribor, too little of latter.
HCAS re: Flipper. No call for adding that additional stress when you don't know what you can lean on anymore. he is already in 7000, I wonder what kind of size he will have once he gets a few mil into Rotterinvest? I think good strategy is to take him out for the whole lot and the next 2 levels with it along with all the spreads now while we still have the chance, If only I could increase my limits a bit....
Still trading spreads and directional.
H20 as a general rule volume that just increases and decreases on bid/ask can be considered locals ,volume which actively lifts and hits irrespective of volume considered paper. Lot of the former going on in Euribor, too little of latter.
HCAS re: Flipper. No call for adding that additional stress when you don't know what you can lean on anymore. he is already in 7000, I wonder what kind of size he will have once he gets a few mil into Rotterinvest? I think good strategy is to take him out for the whole lot and the next 2 levels with it along with all the spreads now while we still have the chance, If only I could increase my limits a bit....
twalker, that sounds like a plan.....this guy needs to be taken out before he grows to a size thats untouchable...BUT I personally think he's able to absorb a few ticks loss on 7000 lots without much fuss. He has owned these markets for aquite a long time, so Im guessing he has very deep pockets. The only possible situation that will take him out of the game permenantly is being on the wrong side of a terrorist attack, or another big news story that come out of the blue. I sincerley hope there isnt another attack like 9/11 but if there is, im pretty sure it would flush all these rats out of the market
what is going on ?
flipper/ flippers /spreaders who is the biggest drag ?
I notice that people are very concerned about the amount of paper going through the market,
1. why would this suddenly drecrease/increase when the exchage reported order volume has sayed approximatly stagnent over the last few months.
2. would it be possible that the paper volume was esentially staying contant but still being taken from the observed market e.g has the paper shifted to being implied/spreads getting traded ?
would it be possible that the slowdown in processing times were the particularly nasty side efffect of a spread based arbitrage technique which has increased the number of implied out prices do people think this is interacting with the flipping activity ? e.g did people think that performance was degraded before this guy (or guys ) started flipping ?
what can be done to improve the situation ? e.g could / should the situation be improved by a change in the market or its rules ? should spreaders be put at a disadvantage / what if a spread only contract were listed to split explict / outright could anyone else see that working ?
In short the flipper is he just playing by the rules? surely professional traders shouldn't look at the bids and asks depth they should look at where the paper is flowing and then decide where they want to be ?
flipper/ flippers /spreaders who is the biggest drag ?
I notice that people are very concerned about the amount of paper going through the market,
1. why would this suddenly drecrease/increase when the exchage reported order volume has sayed approximatly stagnent over the last few months.
2. would it be possible that the paper volume was esentially staying contant but still being taken from the observed market e.g has the paper shifted to being implied/spreads getting traded ?
would it be possible that the slowdown in processing times were the particularly nasty side efffect of a spread based arbitrage technique which has increased the number of implied out prices do people think this is interacting with the flipping activity ? e.g did people think that performance was degraded before this guy (or guys ) started flipping ?
what can be done to improve the situation ? e.g could / should the situation be improved by a change in the market or its rules ? should spreaders be put at a disadvantage / what if a spread only contract were listed to split explict / outright could anyone else see that working ?
In short the flipper is he just playing by the rules? surely professional traders shouldn't look at the bids and asks depth they should look at where the paper is flowing and then decide where they want to be ?
I have a story about this from my days on Project A. I don't remember the exact year this happened, sometime between 1997 and 2000. On Project A there was a ticker which showed the size of the trades and who initiated the trade. This was great because you could see what was paper and speculators. Trading the evening hours in Chicago was a little thin so I would keep track of what the Speculators were doing along with the guy who sat next to me, Mitch. There was a small options trading firm named Dream Team trading, yeah pretty lame, and they had someone trading at night who got into the habit of spoofing to try and get the locals to buy or sell. He would through in anywhere from 200 to 500 and sometimes someone would fall for it and puke out. We figured it out pretty quick however because he would never leave anything in for very long.
One night we just started rallying, I can't remember what the news was but we were up a point and a half (48 tics) at the end of the night. Liquidity really dried up so there was never more than 100 up when 500 up was normal. Towards the end I see DT2 (Dream Team's traders acronym) buy 500. Mitch says "holy ****" he got short those a handle lower." I was incredulous, but Mitch insisted he saw him pull his usual move and get filled. on it. Sure enough we never saw DT2 trade again.
Moral of the story is that pro-rata encourages placing oversized orders and it is dangerous. DT2 could have bought those back much earlier and not having gotten burned so maybe this is not the best example but I have my own story of getting caught like this. I think it is an inevitability. Whoever said that all it will take is getting caught in a fast market is absolutely right.
One night we just started rallying, I can't remember what the news was but we were up a point and a half (48 tics) at the end of the night. Liquidity really dried up so there was never more than 100 up when 500 up was normal. Towards the end I see DT2 (Dream Team's traders acronym) buy 500. Mitch says "holy ****" he got short those a handle lower." I was incredulous, but Mitch insisted he saw him pull his usual move and get filled. on it. Sure enough we never saw DT2 trade again.
Moral of the story is that pro-rata encourages placing oversized orders and it is dangerous. DT2 could have bought those back much earlier and not having gotten burned so maybe this is not the best example but I have my own story of getting caught like this. I think it is an inevitability. Whoever said that all it will take is getting caught in a fast market is absolutely right.
TWI
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Jonpo, ot sure I understand your point Flipper is allowed to do what he does people just get pissed off with him when they lose money because of his antics. Spread products are already seperated in Liffe stirs.
tbill - I agree that the pro-rata monkeys sticking in 1000+ clips in Euribor will eventually be eaten alive when the real volume start throwing it around. some of these guys have not been around long enough to see it happen before but we had a small taster the last couple of weeks with a buyer in euribor lifting some 10,000 clips. As for flipper he sticks in Eurex which is fifo so no pro-rata danger there, he will survive and proper I have little doubt.
tbill - I agree that the pro-rata monkeys sticking in 1000+ clips in Euribor will eventually be eaten alive when the real volume start throwing it around. some of these guys have not been around long enough to see it happen before but we had a small taster the last couple of weeks with a buyer in euribor lifting some 10,000 clips. As for flipper he sticks in Eurex which is fifo so no pro-rata danger there, he will survive and proper I have little doubt.
Gun, ordinarily you would be right - but the exception with this guy is that he has the bunds in his back pocket aswell - ie if he does get filled at size, he can send the bunds where he want (99.5%) of the time, and so take off his schatz onside...its going to take some huge huge event to take him out the game, like german debt being downgraded or something, could be on the cards
bobltrade72
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Don't know if this thread is still active but felt compelled to write. This past week has seen the flipper more active than ever this year i.e bid/offers up into five figures and flipping the schatz mercilessly let alone his bund bobl activity. Was nice to see him get hit on about 9000 bobls today but he just shook it off. Also I think we underestimate the depth of his pockets, even a terrorist incident he could swallow I feel. The argument will go on and on but the only point I feel Eurex do not justify is that we all put our orders in in good faith i.e the size we regularly get filled on whereas his audit trail would surely not corroborate this. Obviously Eurex have no interest or incentive to do anything about him though.
Today was one of the worst days Iv seen with the Schatz flipping. It was totally untradeable, 9000 bid going 9000 offered. Unless you're willing to hit/lift a bid/offer that size, it was difficult. bobltrade72, you're prob. right in saying he could survive a terrorist attack or other event, but Im clinging on to the hope 
I don't agree with the insinuation that what the Flipper (or any other wannabe flippers) does is either wrong or necessarily detrimental to other traders in the market.
It is true that his actions do have an effect on the market and so typically when he decides to go long (or finds himself with a long position due to sitting on bid and offer), he is able to move the odds in his favour that he makes money. However, there is obviously far more risk involved than German debt getting downgraded (when he is long) and a terrorist incident (when he is short). Presumably he is fully informed and prepared for scheduled data releases, but there are still plenty of unscheduled events or significant flows in the market that can cause him losses. Moreover, he is adding liquidity to the market, which would normally be welcomed by issuers, marketmakers, traders and investors.
But what I am more interested in than the morals of what he does is whether other traders can benefit.
If you are a mid or longer term trader, you will be unaffected (the Flipper does not move the market more than 1-2 basis points) and I doubt that he typically participates in larger movements.
If you are a short term trader/scalper/whatever you want to call it, your strategies certainly will be affected but you have new opportunities.
Whereas before you tried to make a tick or two out of the aggregate of a whole community of trading decisions, now you are faced with with a large additional player* who is probably doing something similar to you but in far larger size and considerably higher conviction. On the whole, you know that his initial trades will be supported by larger volumes if necessary. Therefore, if you can find a way of reading what he is doing and what his positions are, you can "piggy-back" him, significantly improving your odds of making the right call, and when it goes wrong you should be able to bail out quickly because there is always plenty of liquidity for your smaller size. It is obviously not easy to identify one person's actions in a large, anonymous market, but I consider it is easier to do this than it is to read an aggregate of many different market participants. A close look at the quote report of the various contracts can be very revealing.
Given that most allegations of market manipulation are unfounded, and the obvious resistance by Eurex to curtail the Flipper's activity, there is no point in complaining about his presence in various markets. Instead, try to identify exactly what he is doing and see if you can't adapt to improve on your original performance. I would be interested to hear what others think about this.
*I actually believe there is more than one flipper; only currently any large trade entries are attributed by many to Mr Rotter.
It is true that his actions do have an effect on the market and so typically when he decides to go long (or finds himself with a long position due to sitting on bid and offer), he is able to move the odds in his favour that he makes money. However, there is obviously far more risk involved than German debt getting downgraded (when he is long) and a terrorist incident (when he is short). Presumably he is fully informed and prepared for scheduled data releases, but there are still plenty of unscheduled events or significant flows in the market that can cause him losses. Moreover, he is adding liquidity to the market, which would normally be welcomed by issuers, marketmakers, traders and investors.
But what I am more interested in than the morals of what he does is whether other traders can benefit.
If you are a mid or longer term trader, you will be unaffected (the Flipper does not move the market more than 1-2 basis points) and I doubt that he typically participates in larger movements.
If you are a short term trader/scalper/whatever you want to call it, your strategies certainly will be affected but you have new opportunities.
Whereas before you tried to make a tick or two out of the aggregate of a whole community of trading decisions, now you are faced with with a large additional player* who is probably doing something similar to you but in far larger size and considerably higher conviction. On the whole, you know that his initial trades will be supported by larger volumes if necessary. Therefore, if you can find a way of reading what he is doing and what his positions are, you can "piggy-back" him, significantly improving your odds of making the right call, and when it goes wrong you should be able to bail out quickly because there is always plenty of liquidity for your smaller size. It is obviously not easy to identify one person's actions in a large, anonymous market, but I consider it is easier to do this than it is to read an aggregate of many different market participants. A close look at the quote report of the various contracts can be very revealing.
Given that most allegations of market manipulation are unfounded, and the obvious resistance by Eurex to curtail the Flipper's activity, there is no point in complaining about his presence in various markets. Instead, try to identify exactly what he is doing and see if you can't adapt to improve on your original performance. I would be interested to hear what others think about this.
*I actually believe there is more than one flipper; only currently any large trade entries are attributed by many to Mr Rotter.
Thats a great point cas54, I have attempted to read his plays many times before. On the whole, its a decent way to trade in these markets. Reading into his positions can be profitable - the key is to understand that rotter, and his band members, all play on the psychology of traders. They know that scalpers will be leaning on certain bids and offers - and also know they can spook traders out of waiting on the bid/offer to hit/life the next best price. BUT as easy as this sounds, you have to understand that during the ENTIRE trading day, he/they will have huge bids n offers across various prices - slowly building up bids/offers to get filled once they have put on their huge positions. Also, I believe introducing the half-tick's on the Schatz hasn't helped locals in avoiding the flippers - it simply increases volumes, and pushes traders into scalping for smaller profits.
Still, the market is the market - it doesn't matter what fun n games are going on. Its a matter of evolving. In my book - either you evolve, or you get eliminated!
Still, the market is the market - it doesn't matter what fun n games are going on. Its a matter of evolving. In my book - either you evolve, or you get eliminated!
bobltrade72
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Whether he is wrong is down to opinion- is Tesco's wrong for squeezing out independant high street retailers? There is no question that he is detrimental to the majority of intra-day traders, particularly spreaders, I know of a dozen or so who can no longer compete and have sought alternative employment in the last six months alone although obviously the 'flipping' is only a contributary factor. Nevertheless it is considerable, when trading a short term spread 90% of it is execution of the trade which at times is now impossible particularly bobl/schatz.
Being able to read what he is doing does not help in this, you can't lift his 10000 offer and wait to see if you're right and he flips it your way before putting on the other leg. As newsoros correctly points out the whole point of what he does is to catch out the locals- which he does superbly. Admittedly when trading outright you can try and piggy back him, but get it wrong and it can be very costly although at the moment it is probably your best bet and time of sales is the place to get the info you need.
Being able to read what he is doing does not help in this, you can't lift his 10000 offer and wait to see if you're right and he flips it your way before putting on the other leg. As newsoros correctly points out the whole point of what he does is to catch out the locals- which he does superbly. Admittedly when trading outright you can try and piggy back him, but get it wrong and it can be very costly although at the moment it is probably your best bet and time of sales is the place to get the info you need.
