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Cessation of Micro JPY / The first Micro Bites the Dust


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Cessation of Micro JPY / The first Micro Bites the Dust

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 SMCJB 
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From CME

FX Advisory

Effective December 9, 2021 and pending all relevant Commodity Futures Trading Commission (“CFTC”) regulatory review periods, Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) will cease listing additional contract months of the Micro Japanese Yen/U.S. Dollar (JPY/USD) Futures contract (the “Contract”). The last listed month of the Contract will be March 2022. CME will permanently delist the Contract on March 15, 2022.

https://www.cmegroup.com/notices/ser/2021/12/SER-8890.html

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 josh 
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But the E-mini JPY/USD, with less notional traded, survives?

https://www.cmegroup.com/markets/fx/g10/e-mini-japanese-yen.quotes.html

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 SMCJB 
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They launched another Japanese Yen Micro contract, M6Y a few months back, and I believe they are delisting this micro (MJY) in order to promote the other contract (M6J).

For me there are several issues with this. 6J (full size, ¥12.5M), J7 (eMini, ¥6.25M) and MJY (Micro, ¥1.25M) are all JPY/USD but the new M6J is USD/JPY ($10K so currently approximately ¥1.3M). Hence in order to trade this you will have to have JPY on deposit at your broker as the margin requirements are in JPY. Also any profits or losses from trading will be in JPY and not USD. Finally while MJY and 6J were fully fungible (meaning you could offset them on a 10:1 ratio) that's not the case with 6J and the new M6J.

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 josh 
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SMCJB View Post
They launched another Japanese Yen Micro contract, M6Y a few months back, and I believe they are delisting this micro (MJY) in order to promote the other contract (M6J).

For me there are several issues with this. 6J (full size, ¥12.5M), J7 (eMini, ¥6.25M) and MJY (Micro, ¥1.25M) are all JPY/USD but the new M6J is USD/JPY ($10K so currently approximately ¥1.3M). Hence in order to trade this you will have to have JPY on deposit at your broker as the margin requirements are in JPY. Also any profits or losses from trading will be in JPY and not USD. Finally while MJY and 6J were fully fungible (meaning you could offset them on a 10:1 ratio) that's not the case with 6J and the new M6J.

Agree on your concerns .. it was nice to have consistency with the big contracts having USD as the quote instead of base currency, and here comes a USD/JPY. M6J matches the popular M6E, but M6E is fungible, as you said, with 6E, but M6J is not, with 6J. The minis, micros, it's a big mess.. E7 is the e-mini euro, for example. Hopefully they can standardize them.

I don't mind the JPY currency .. I keep a running balance of JPY and HKD in my account and if you don't have JPY, there's an implicit/automatic conversion that happens (my broker does anyway, I would assume they all pretty much do this).

What I *really* wish CME would do is ditch the QM half crude contract. The 2.5c tick size is awful. At this point MCL is a better choice IMO, at 1/10th, but MCL is only doing 60% or so of the daily notional that QM is, so I guess it has to stick around for a while.

For reference, here are the pages for the MJY (to be decommissioned) and the M6J, respectively:

https://www.cmegroup.com/markets/fx/g10/e-micro-japanese-yen-us-dollar.html
https://www.cmegroup.com/markets/fx/g10/micro-usd-jpy.quotes.html

As I write all of this, I realize, I hardly ever trade the currencies ... why do I care?

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 SMCJB 
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If you look at Silver (SI, QI, SIL) and Gold (GC, QO, MGC) the Mini's are effectively dead, and the Micro's very robust and liquid. I suspect its only a matter of time until Crude (CL, QM, MCL) goes the same way. As somebody who has 'provided liquidity' in QM and different times over the year I can tell you that as horrible the tick size is for "takers", its a huge advantage for the "maker". Given that the true/important customers of the exchanges are now the liquidity providers I suspect they will encourage the exchange to keep them listed as long as they can.

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