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Block trades with the CME

  #13 (permalink)

Legendary Market Wizard
Houston, TX
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Grantx View Post
I can think of only 2 reasons (Backed by a whole month of futures experience):
1. They have another buyer that will take the other side of the trade and the market maker is picking up the spread on this order? Basically a glorified middleman.
2. They know something the trader doesn't and is looking to capitalise on their poor decision?

If the question was, "I'm looking for an offer for 1000 March" then that would be more likely to apply, but if somebody is making the quote without knowing the directional interest they can't have matching orders and/or better information for both sides of the trade.

Grantx View Post
You will see the order being executed on the exchange wouldn't you?

I guess that depends upon what you mean by "the exchange". If your watching the block trade feed then yes. But if your trading and watching your trading software then no. Block trades are not printed as a trade on the normal data feed.

Grantx View Post
This raises another question, do they show the block trade on the website prior to executing it on the exchange? I suppose either way there still is no edge because algos will front run it quicker than any trader although if its big enough it will have some impact on direction that can be capitalised on (Im rambling. Sorry).

No everything is post trade. I know there are rules on how quickly the trades have to be entered into the system but by the time anybody can see it, it is at least minutes old.

Grantx View Post
Also, does it matter if it is a spread trade? Its size should still be seen by other traders and algos and cause some disturbance and possible trend move regardless of the reason behind it?

Not really.

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