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schizoidman
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Posts: 123
Joined: September 21st, 2005, 7:17 pm

What is an axe?

December 31st, 2010, 5:28 pm

I've heard this phrase a lot, but what is an axe exactly?
 
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acastaldo
Posts: 1416
Joined: October 11th, 2002, 11:24 pm

What is an axe?

December 31st, 2010, 8:51 pm

Sometimes it is spelled AxLoosely speaking, the trader who most affects the market for a stock at a micro level
 
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Martinghoul
Posts: 3256
Joined: July 18th, 2006, 5:49 am

What is an axe?

January 3rd, 2011, 12:42 pm

I have always understood it as "ask", i.e. "I have an axe to do A" or "I am axed to do A" means "I am asked to do A", that is "I want to do A"... I could very well be wrong.
 
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frolloos
Posts: 1621
Joined: September 27th, 2007, 5:29 pm
Location: Netherlands

What is an axe?

January 3rd, 2011, 1:54 pm

i think i means a conviction / view in the outright case, or preference in the case of covering an existing short.
 
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prodiptag
Posts: 124
Joined: September 12th, 2008, 4:41 pm

What is an axe?

January 4th, 2011, 6:35 am

usually means, a special interest from the trader to do that trade, mnostly to cover existing risk positions (most likely) - and corollary -> he is ready to quote very tight/ pay bigger part of the pnl to sales etc. So "I have an axe to do A" means "I am very interested to do A"
 
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thedoc
Posts: 61
Joined: July 27th, 2010, 6:53 am

What is an axe?

January 4th, 2011, 11:37 am

I always assumed it derrived from the phrase 'I have an axe to grind'. It generally means that one has an interest in taking a particular side of a trade, either to get out of a position, or to enter into one. So if, for example, someone says "I'm axed to pay 2y £ swaps", then they mean that they have an interest in paying 2y £ swaps, and will be better payers (and consequently a poorer receivers) than the rest of the market. This in turn would suggest that they're eager to add bearish rates risk.
 
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farmer
Posts: 13479
Joined: December 16th, 2002, 7:09 am

What is an axe?

January 4th, 2011, 3:33 pm

Nasdaq stocks used to be quoted with large trading increments. This meant if Goldman Sachs stepped in with an offer for INTC at 45 1/2, you could not lean on him or front-run him at 45 3/8 as a market maker.So if INTC had been bubbling up a couple times, it might almost get to the point where you could trend trade it at a 1/2 spread. But then if Goldman Sachs stepped in, or stuck with an offer at 45 1/2, that meant he had basically chopped off the trend.By calling him the "axe" I took it to mean he had the ability to chop off any trend or run, because he was known to represent size. Goldman Sachs could reveal information by exposing himself as the axe back in those days, because you could not front-run him at those huge increments. The best you could do is offer along side him, which everyone would.So all the market-makers with no business to do would run one way or the other on any order flow, until Goldman stepped in, and then the market would sit there for a protracted period of time.It is useful to understand that all market makers were required to post a bid and offer with, say, a 2-point spread at all times. So their bids and offers being present at a particular level did not indicate any type of support or resistance in the form of real interest.Understand that in the absence of an ability to trend trade, there is tons of trendiness. So if at 10:30:00 there were 10 market makers at the offer, and at 10:30:10 there were 4 market-makers at the offer, it was reasonable to predict that at 10:30:20 there would be no market-makers at the offer, so it would become the bid.So any rotation at the bid and offer was very easy to extrapolate into a 1/2-point move. Two market-makers would leave, one would come in, the offer would steadily erode. Not so with Goldman, because Goldman is the axe. So if the offer is steadily slipping away, but the axe drops in, it outweighs the other action.Large trading increments seem to be a prerequisite to there being an axe. Otherwise he would have to hide and could not allow himself to be observed. Either that or perhaps some kind of sweeping opportunity, so that by the time you see him it is too late.In this case he can expose himself up to the point where you would be able to front-run him. The safest you can assume is that the market will now go sideways, whereas it was going down before he started buying. So I guess there can still be an axe, who heralds the beginning of two-way action, and the stabilization of prices, after a trend or air pocket.
Last edited by farmer on January 3rd, 2011, 11:00 pm, edited 1 time in total.
 
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Panang
Posts: 150
Joined: June 8th, 2006, 11:22 am

What is an axe?

January 9th, 2011, 10:32 am

If i have an axe, it just a preference for doing that than the opposite e.g. am an axed payer of swaps, axed seller of ty's, axed buyer of 2s5s10s fly... If a client has something to do, they may ask a number of market makers for axes, so that they can see who is likely to give them the best level. If i am an axed payer, i will generally show a mid skewed higher, or even a mid bid.
 
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nayakchandan
Posts: 13
Joined: December 23rd, 2009, 8:34 am

What is an axe?

April 7th, 2011, 1:31 pm

It just means the trader would trade favorably in axe (by giving better quotes), basically to match off an existing position in the opposite direction
 
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ogarbitrage
Posts: 16
Joined: February 16th, 2009, 3:10 pm

What is an axe?

April 8th, 2011, 11:29 am

QuoteOriginally posted by: thedocI always assumed it derrived from the phrase 'I have an axe to grind'. It generally means that one has an interest in taking a particular side of a trade, either to get out of a position, or to enter into one. +1
 
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jdp101
Posts: 7
Joined: November 20th, 2008, 9:10 pm

What is an axe?

April 16th, 2011, 7:28 pm

a list from a sell side firm (typically your coverage) with a list of securities they will buy/sell at given price
 
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HTFB
Posts: 148
Joined: February 17th, 2004, 12:47 pm

What is an axe?

April 27th, 2011, 12:07 am

a hand tool with one side of its head forged and sharpened to a cutting edge, used for felling trees, splitting timber, etc
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