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The New Micro Contract - MICRO BITCOIN coming May 2021
Although I would somewhat agree I would think this is the natural process.
They don't just pull these out of thin air one day and start charging ridiculous fees.
They are a business and this is an offering.
They have put put massive resources behind these. If you want to trade them you should understand what they are good for and not good for.
I too hope though in the long run they will catch on.
There are many micros that are untradeable.
If the demand never materializes it might go into the oblivion like so many others.
Its a chicken and egg thing.
I hope though it does catch on an the fee structure can be reduced eventually to daytrade. Just not in the cards right now for the foreseeable future I'd imagine.
Very disappointing but expected,
US traders who wish to comply with trading crypto micro futures on US exchanges, this is the only cryptocurrency futures product (along with ether)
I will trade Spot where I can define my tradesize and risk effortlessly and still remain with a US cryptocurrency exchange. There is not a good option for trading us crypto exchanges algorithmically, the futures product would have helped that problem.
One of the reasons so many futures traders blowup accounts is leverage so maybe the CME/brokers not allowing trading these contracts, are doing traders wishing to trade crypto a favor and this will increase their chances of survival overall.
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: 4,388
Thanks Received: 10,207
@Sandpaddict and @masterchanger I think its intentional on their part. The 2.38:1 leverage that you can get on CME Bitcoin futures while low for non-US residents is the only leverage US residents can get trading crypto. (Other than ICE Bitcoin which is even better 2.85:1 or CME Ether which is slightly worse at 2:1). The high margin is for risk reasons. I suspect the high fees are to discourage rampant speculation.
As to success. MBT has traded around 20500 lots today while BTC has only trade about 8000. So even though on a relative value basis BTC is almost 20x BTM notional, from a fee perspective MBT is higher than BTC. They probably consider that a success.
Another question to ask, does the tighter bid-ask spread actually offset the significantly higher fees? Probably not, but it does eat into them.
I agree that this might protect some account from blowing up quickly but the high fee will ensure that they will loose for sure(even slowly). The thing is that futures day trading is zero sum so we have to have looser(many times more than winners) in order to have small percentage of winners. The bigger the fees and commissions the smaller percentage of significant winners and at some point, if fees/commissions high enough - nobody wins in a long term.
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: 4,388
Thanks Received: 10,207
Week one trading highlights:
• 16,112 average daily volume
• 3,192 average daily open interest
• 36% of overall volume came from outside the United States
• Over 50% of the trades were executed during non-US trading hours with quoting available nearly 24 hours a day
• 834 unique, active accounts trading
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: 4,388
Thanks Received: 10,207
Well the Bitcoin Micro seems to be off to a great start. Volume is multiples of the full size, which given that fees are only half means CME is making more on the Micro than the fullsize.
All would seem to be good, but is it? I'm curious to see what happens when we get to the first roll. If we assume $1.50 FCM, $2.50 Exchange and $0.02 NFA then people are paying $4.02 per trade for execution. So $8.04 on a spread. Given that contract size is 0.1 Bitcoin thats $80/coin to roll from May to June. With the full size contract the bid ask is currently $3 wide 116/119. Are people going to happy paying $80/coin in fees on a spread that has a $3/coin bid/ask.
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: 4,388
Thanks Received: 10,207
Curious whether anybody was trading the Micro on around the lows today (ie sub 35/36000) and what their experiences were. if you were a buyer appears that there was massive negative slippage (good for sellers). Market makers ran for the hills and Globex was rejecting sell orders that were 1000 above where the full size contract was trading in June and July on the grounds that they were to low! (I guess -8000 is pretty low!)
