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What Does (E) Stand For?

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I have been looking to get a better handle on Futures and move from the spot FX market. I wonder if a few folks can give a naive Futures trader a mini-education.

 

I tend to trade the GBP/USD Spot market but after discussions with a fellow trader who trades the same thing in Futures with PLENTY of commission savings over spot- I am very interested in the transition.

 

My question is this:

I'm curious if someone can tell me what the difference between these two instruments is?

British Pound (E) (B6M8) Jun 08 1.9491 1.9519 1.9406 1.9454

British Pound (BPM8) Jun 08 1.9420 1.9453 1.9408 1.9453

 

Both are June 08 Futures contracts, there is an obvious difference in pricing of the instruments and one has this (E) notation. :confused:

 

Can any of the old souls of the Futures world help in deciphering this new world of notations for me?

Thanks!

Aaron

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You're correct, Trader - it's the ELECTRONIC traded contract.

 

Also note that the quote for the pit contract does not show traded volume, while the Electronic version does

 

-fs

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forsearch:

So if I am on an electonic platform, I would be monitoring the price and volume of the (E) contract then correct?

 

Why such a difference in the (E) price and the standard price (maybe this is the "pit price?")

 

Aaron

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Yes, that's correct, assuming that you're looking at the electronic (E) contract in your quotes.

 

The two contracts trade side-by-side during the day, when the live trading pits are open. They are fungible, meaning that you can buy one pit and sell one electronic to offset it. Don't know why anyone but an institution or floor member would do it, since the cost to trade electronically is far cheaper.

 

Mainly the institutions will use the pit trades, as most of the volume has migrated to the screen (electronic). Still, at the end of the trading day, the electronic (which for FX closes 2 hours after the pit does) will settle based on the last price of the pit for the daily closing price.

 

Keep in mind that some trading platforms now have the ability to trade both the pit contracts as well as electronic contracts using the same setup. Open ECry is a good example of this. You don't have to call in a pit order, just send it in on the DOM like an electronic order. Very nifty, indeed.

 

-fs

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fs-

Wow you are a wealth of info. Thanks for helping me on this. Feel like I'm starting over trying to transition to Futures from Spot.

 

Any chance you can give me the basics of Futures? Anything you have observed as a difference in Futures vs. Spot FX if you have ever traded it.

 

Aaron

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i moved from spot forex to futures for more than 1 month now.. don't notice any significant difference. i mainly trade eur and jpy futures by the way. the volume of gbp in futures is even lower than eur and jpy.

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