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The New Micro Contract - MICRO BITCOIN coming May 2021
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: 4,384
Thanks Received: 10,206
Question will be.
a) Can you find a broker that will let you trade it (a surprising amount will not)
b) If so what will their margin requirement be (a surprising amount charge double CME margin)
c) and what will they charge to trade it?
An additional question would be regarding margining of spreads and their viability...would be interesting to see if we can model spread behaviour based on historic full size BTC future spreads
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: 4,384
Thanks Received: 10,206
For all the other micros, the micro is completely fungible with full size contract. Even though products like SIL and MGC are physical delivery contracts, you can offset 10 MGC against 1 GC and have no physical obligation. So margin is offset able as well. edit: Spreads on full size are about $2k-$3k/contract so would expect micro to be about $40-$60. Problem is the spreads don't trade much AND the implication is switched off. So its just a bunch of Algo's ticking it each other trying to rip off the unsuspecting trader of a few ticks. edit2: Also commissions are so high on the full size that even with the reduced tick, the amount you need to make to cover commissions gets prohibitive.
Tick on the full size is $5 x 5 coins = $25
Tick on the Micro is $5 x 0.1 coins = $0.50
So 58800 to 58805 on full size is $25 and on micro will be $0.50
Although I would welcome any micro-product in futures to help traders deleverage and reduce risk, I would draw your attention to the fee structure for this product before you decide to go scalp it or even trade it intraday.
Just as @Big Mike is, I'm an advocate for the independent trader and want to make sure folks are aware.
Cheers!
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