The reaction to the new Trading hours that ICE have brought in for TTF has come under some scrutiny recently (maybe an understatement!). Our LinkedIn posts on it have been a hotbed for discussion on it, and we seem to have found ourselves in the middle of the debate!
After sending out an email to our clients regarding the topic, a meme came across our desk which we posted on LinkedIn. (We still haven’t found the person who made it).
It clearly struck a chord with the European traders as the post has had almost 300 likes and plenty of discussion in the comments.
The main themes brought up against the move were the lack of volume overnight, sticking to the traditional hours and growing fears that we are moving towards 24/7 trading.
Soon after, we put a poll on LinkedIn to gauge the true thoughts of our connection base. This ended with around 83% of participants (265 in all) being against the changed trading hours.
As a result of the attention the posts were getting, we were asked for comment on the situation from Bloomberg. Here’s what we replied:
“Talking to my client base it seems like this move hasn’t gone down well at all with most active TTF traders. It seems to have ruined liquidity even after 7am (UK) and into the 5pm (UK) close.”
“Anecdotally there appears to a “movement” amongst traders to basically ignore it and stick to trading during the traditional hours. This has been reflected in low overnight volumes and very wide bid/ask spreads. Which I’m not sure anyone would want to trade anyway!”
“Overall early evidence is this is an “own goal” from ICE, but I guess time will tell.”
“From a personal point of view I have always favoured markets that have a shorter session as you then get a “proper” opening auction and closing rotation. This can actually aid liquidity. As a Technical Analyst this is far more interesting with respect to price discovery. For years now exchanges seem to have ignored the wants and needs of ‘human’ traders in favour of chasing algorithmic driven liquidity. I think this is a dangerous game, personally.”
We have been ‘around the traps’ on this topic in the past few days, engaging in discussion with those who believe that this is a positive move for TTF. There are some who believe that this is the natural progression for a market that wants to move towards being a global benchmark for Natural Gas.
However, our main concern is how it is being received by our client base. TTF has traditionally been a market for the ‘Pro’ trader, and the move does appear to have had a negative effect on volumes in the first half an hour and last half an hour of the ‘traditional’ hours.
Having said that in overnight trade on Monday (20th April) it had posted volume of 2500 lots, which says there were some trades facilitated overnight after news flow over the weekend.
As mentioned in the quote above, the auction process is central to our Market Profile pillar of analysis.
From a Technical Analysis perspective, there are some ways in which this move makes our life a bit easier here at Futurestechs. We have been scratching our heads in recent times (and back in 2021-22!) wondering where the TTF would open, so the change of hours gives us something to work off in that regard.
The reports will continue to hit our clients inboxes at our regularly scheduled 6:30am – 7am time frame. Clive is minded that he needs his beauty sleep more than ever at his age!
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Clive Lambert FSTA – FuturesTechs
25 years of institutional expertise in the UK and European Energy Markets and 10-time Technical Analysis award winner. Clive provides industry-standard technical outlook, utilising Market Profile and Candlesticks Analysis for over 100 global trading desks.
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