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The New Micro Contract - MICRO BITCOIN coming May 2021
So a "BIT" confused, in the MBT (micro contract) what is a tick? A 1 cent move in BTC ?, a 1 dollar move in BTC?, ???
Does anyone know this please.........
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,386
Thanks Received: 10,206
Well the Fees have been announced, and @FuturesTrader71 warnings were justified. The fees for the Micro Bitcoin, for Non-Members is $2.50/lot which is half the full size contract, even though its 1/50th of the size!. Yes that's 5 ticks (ie $25 price move in Bitcoin) and 25x the fee for the full size assuming equal size. At 10 ticks per round turn, I doubt we will see many scalpers!
While I wasn't crazy enough to thinks fees would be 1/50th the full size, I didn't think they would be half either. For perspective on a relative basis, equity micro fees are just over 200% of the eMini's. Using a similar ratio Micro Bitcoin would have been around 20c vs $2.50 actual (all non-members).
Will be interesting to see what happens. Even if I'm a member, trying to arb Full Size vs Micro, I will have to make $10 to break even. So from an Arbitrage standpoint Bid/Ask will be $20 wider than full size, which is 50+% wider.
The CME fee schedule has been updated with the Micro-Bitcoin Futures rate listed. In my message above, I mention that there are indications that the fee structure is very high for this product and not to expect to scalp it. Well, see the image below to find the rate per contract (now remember that this is a $0.50 per tick product.
Here's what it looks like:
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I was pretty hyped for this contract until the fee structue was announced. The exchange fee is on par with the eminis, which have much higher tick values. Other micro contracts are more reasonable than this, I am not sure what the CME is going for here.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,386
Thanks Received: 10,206
Of course I should be thinking a little more outside the box. This isn't like QM & CL or QG & NG, market makers aren't providing liquidity by arbing vs the other futures contracts, they are providing liquidity versus the cash market! Bid Ask on the Micro seems to be consistory $10-$20 which is much better than the full size contract.
So when do we get the Ether Micro? With Ether doubling in the last 40 days/tripling this year the contract size on that is now upto $160k. Not the $290k of Bitcoin but still almost double what is when it launched.
