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CME reducing tick size of 6E EURUSD futures


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CME reducing tick size of 6E EURUSD futures

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https://www.cmegroup.com/tools-information/lookups/advisories/ser/files/SER-7425.pdf



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What does that do to E7?

This will drastically change the way I trade 6E now...

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tturner86 View Post
What does that do to E7?

This will drastically change the way I trade 6E now...

It seems, but I'm not sure, that they are really just increasing the "resolution" from one pip to half a pip.

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tturner86 View Post
What does that do to E7?

This will drastically change the way I trade 6E now...

How will this affect you?

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TheShrike View Post
How will this affect you?

I use E7 as a half of 1 6E, because of the tick size. Now they are esscentially the same. (I am assuming that margin isn't being changed, so E7 would be more beneficial since it is lower margin.)

1 6E = 2 E7 = 5 M6E. I would trade a mix of all to have different position sizing options. I did this scaling in and out over longer timeframes.

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tturner86 View Post
(I am assuming that margin isn't being changed, so E7 would be more beneficial since it is lower margin.)

Interesting...

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 Wartrace 
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They are probably doing this to increase revenue. They will likely keep the same exchange fees for this product as the current .0001 tick size.

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 kbit 
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They did the same thing to the yen at some point...traded it about a month ago and it took me by surprise.

Anyway as one who dislikes change anyway, I think it sucks.

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I think smaller tick sizes make it more attractive to HFTs as it increases arbitrage opportunities.

What will be interesting is what it does to liquidity. Will we now see half the liquidity at each level or will we actually see more people come in?

It is their market after all and no doubt they are doing it to increase revenues. From a risk perspective, there is no difference for us guys between trading the 2 markets - UNLESS liquidity overall reduces and then risk goes up.

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