NuclearPhynance Archive

Will any of you be trading these animals or will they go the way all other exchange-traded volla products have gone?



Deutsche-boerse announcement

Already did trade them... but more for kicks than anything else. Certainly didn't elicit too much interest yesterday (FVSM didn't trade at all).



I think the reason these exchange traded vol derivatives don't take off has to do with the constant maturity nature, which, for equity option traders, who tend to move in a space heavily oriented towards fixed expirations, is simply not that interesting. Wrong way to go about it, IMHO.

Have members received any incentives at all to trade them / make markets? Have they even been consulted on the structure of the contract?

There is a designated market making scheme (all trading and clearing fees refunded). Dunno if anyone is doing that officially. Don't think so.



Eurex consults regularly with members, however I believe they consult with the wrong members. The exchange has changed alot from when it was DTB. A bunch of MBA students running the show there nowadays, which is rather unfortunate.



Latest case in point: They're listing Single Stock Futures.... Expressionless ... welcome to the Muppet Show.

Thanks for the insights. Looking forward to the 23rd then...

[i]Eurex consults regularly with members, however I believe they consult with the wrong members.[/i]



they're also a little slow on the uptake...re-introducing the 30y future was suggested to them >1.5y before it happened.

Don't even get me started... I started badgering them about the combinations market (Now called strategy wizard) about 7 years ago.



Incidentally, people may not be aware of this, but many years ago, in the beginning of 1998, Eurex had a future on CM ATM Volatility on the DAX called the VOLAX-Future. Didn't last very long.

The way OMX Sthlm handles combination markets ( apart from giving you the option to fill out all combos on da computa ) is actually call the OMX dealing desk and ask for a market in Bla bla bla. OMX will ask all others members for a market, making sure that they all understand the correct ratios & size. It's fast and efficient. Like a broker without a brokerage fee and you are 99% sure that there is actually client demand ( not like those london based brokers who call you for a market on a given combination, never come back on that one and call you for another one. At that time, when I was still working at a firm with a book, we suggested just handing over all our positions and volcurves so they could price off whatever they wanted...)

what exactly is the problem with single stock futures?

SSFs are a almost entirely useless product. They offer little to no innovation as an instrument and hence are doomed to fail (and have failed in the past. Look at SSFs in the US or LIFFE.Euronext's USFs). Eurex actually has a better shot at making a little out of them as Deutsche Börse's markets are tightly integrated, but won't make a difference IMHO.