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Trading the new CME E-Micro's (E micro) MES, MNQ, MYM, M2K and other micros


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Trading the new CME E-Micro's (E micro) MES, MNQ, MYM, M2K and other micros

  #191 (permalink)
 
EasyTraider's Avatar
 EasyTraider 
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They'll probably tick on a x2 of the mini tick basis. That's the case with FDXM as compared to FDAX for example.

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  #192 (permalink)
DmanX
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SMCJB View Post
ROFLMAO

@DmanX your wrong on every single account - so wrong that your even wrong on what the NFA fee is! (They changed 15 months ago!) It's not speculation. Exchange fees are announced (20c for non-members +2c NFA fee ... https://www.cmegroup.com/company/clearing-fees.html), Margins are announced (10% of ES. Doh! ... https://www.cmegroup.com/education/frequently-asked-questions-micro-e-mini-equity-index-futures.html - but obviously these are overnight rates and brokers have discretion to charge lower day trade rates). The only thing not announced is what individual brokers will charge in addition to exchange fees to clear them - as this is obviously broker dependent and not CME mandated - which as discussed heavily in the previous pages will be the most important thing in determining your cost - but can be expected to be the same as any other contract. As such I believe the consensus opinion in this thread is that this will be an excellent way to learn without getting destroyed but that due to commissions these are not viable as a stand alone trading instrument.



First things, first. Love the flamegun. Nice touch.

Anyway, here's the thing though... Micro S&P 500 will be the flagship of the micros for the CME. As such, they will want to attract business for them. Now if you look at the e-micro currencies, the exchange + NFA fee for them is $0.18 per side. That's about 11% of the fees charged on the e-mini currencies ($1.62).

Quick reference: https://ninjatrader.com/PDF/ninjatrader_futures_commissions.pdf

Exchange + NFA fees for the eMicro index futures are going to be $0.22 per side.

As for commissions, they could be 25-75% less than the e-mini. In the link above, the e-Micro currencies are charged about 50% less commission than the e-mini ones.



But, like I've been told by a number of brokers, give it about 2 weeks before official numbers are in.

[Insert big, no... massive smilie here]

Cheers.

BTW wasn't wrong about the daytrade margin being $50. So much for...


Quoting 
@DmanX your wrong on every single account ...

And to be pedantic, it's 'you're'. <--- yep I feel dirty for doing it. But it's all about the points to even up the score. :-p

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  #193 (permalink)
 
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 SMCJB 
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This is getting old but I will admit good catch on the your/you're but I did acknowledge that Day Trade margins are dependent upon individual broker's.


DmanX View Post
Quick reference: https://ninjatrader.com/PDF/ninjatrader_futures_commissions.pdf

Exchange + NFA fees for the eMicro index futures are going to be $0.22 per side.

As for commissions, they could be 25-75% less than the e-mini. In the link above, the e-Micro currencies are charged about 50% less commission than the e-mini ones.

If you follow your own link, you'll see that they charge the same clearing rate for the Gold and Currency Micro's as they do all other contracts. Most brokers that I know of are the same. So while exchange + NFA of micro may be about 11% of the larger size, exchange+NFA+clearing (ie "The All In Rate") is closer to 50% despite them being 10% of the size!

Hate to post/quote things for the 3rd time, but since @DmanX still hasn't paged back at all here goes.


SMCJB View Post
Updating previous chart



and another chart. The costs are so high in relationship to tick size I wonder how successful this will be. For the 3 contracts with the super small $0.50 tick size, you'll need 6.88 ticks profit to cover the commission at Tradestation on their standard commission schedule.



Previous deleted post incorrectly had Full Size ($2.40) and not eMini ($1.18 Commissions).


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  #194 (permalink)
 
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@SMCJB what are the micro fees again ? Lol

-P


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  #195 (permalink)
ArthurKathleen
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Hopefully this will bring more beginners to futures rather than all the forex rip off merchants

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  #196 (permalink)
 
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ArthurKathleen View Post
Hopefully this will bring more beginners to futures rather than all the forex rip off merchants

Just like any other asset class, you need to be selective of who you is your clearing. However, in the FX space you can choose good players like IG Markets (now in the US and we clear them), Oanda (trying to get on board now) and for those who are ECPs (10M+ in assets) you can trade with institutional rates through FC Stone and ADM (we clear both).

In FX you can trade with a small amount, notional trade contracts of $1000, and use that to potentially get used to the volatility of the markets.

We had numerous requests over the years for Forex, but I avoided proceeding with spot FX because I was not happy with the terms for the customers, but now I believe the terms are appropriate for the customers along with the technology and execution.

BTW, I did reach out to the CME and asked why they decided on such a small notional value on the micros when all other micros lack liquidity, and all I got was "read the PDF brochure."

Matt Z
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  #197 (permalink)
 
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 bobwest 
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ArthurKathleen View Post
Hopefully this will bring more beginners to futures rather than all the forex rip off merchants


mattz View Post
In FX you can trade with a small amount, notional trade contracts of $1000, and use that to potentially get used to the volatility of the markets.

I probably should't comment here, because I have no personal familiarity with spot fx.

With that said, I think that spot fx is often a decent alternative to the zero-risk, generally worthless pure sim trading that we all are too-familiar with -- and also an alternative to the the higher-risk, tear-your-head-off highly leveraged futures trading that we're also all too-familiar with .

Small-contract futures trading looks like it will fit the bill too, and at least if they are exchange-traded, you won't be trading against your broker when you think you're not. Yes, I know this can happen with fx. (https://en.wikipedia.org/wiki/FXCM .)

Basically, while sim has its place, aspiring traders need to get beyond it and risk some real money, however small, in order to experience the stresses of real trading. Anything that helps this is a good thing. That means that both small-money spot fx and small-contract index futures can fill in the gap, which I think is the value they may have for many traders.

Bob.

-----------------

Edit: this is particularly for brand-new traders, who think sim is reality. It's not, somehow....

There are experienced traders who can use sim productively, because they are aware of the reality of risk and are just trying out strategies.

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  #198 (permalink)
 
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bobwest View Post

Basically, while sim has its place, aspiring traders need to get beyond it and risk some real money, however small, in order to experience the stresses of real trading. Anything that helps this is a good thing. That means that both small-money spot fx and small-contract index futures can fill in the gap, which I think is the value they may have for many traders.

Bob.

-----------------

Edit: this is particularly for brand-new traders, who think sim is reality. It's not, somehow....

There are experienced traders who can use sim productively, because they are aware of the reality of risk and are just trying out strategies.

If the micro eminis could provide liquidity, it could serve as a good solution. This is what I am curious about most, what liquidity will it have.

I agree with your point that traders sooner than later should have skin in the game to experience what real trading is like and to improve their method in real time. But, it is not the size of the contract that is their obstacle in my opinion:
1) It's going through the motions while their position is fluctuations in the market place. It's a pure mind and psychology challenge.
2) The feeling they are never ready. I have spoken to people who spent years in front of the screen (without trading) thinking that they are missing an element that would make them successful if they paper traded a little more or explored more angles. KISS is not what they do.

So the reason I added FX is that many are capable of trading real funds, but their risk capital is small. I hope that over time as they build their net worth, they could potentially afford to trade with adequate capital.

As you mentioned, the paper traders who build new methods while trading real capital, have a completely different angle on paper trading.

Matt Z
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There is a substantial risk of loss in futures tradng. Past performance is not indicative of future results.

Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
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  #199 (permalink)
 
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emini83 View Post
Just a question. What margin should be for an emicro es when the emini is at about $400-500 pre contract? And what tick size should it be? $6.25 per tick or less? Thanx

A bit off-topic, but, anyone who has $500 margin on an emini should call your broker and immediately have them raise it to something sensible like $2000 at a minimum, at least for your own protection in case you accidentally put the wrong quantity in an order.

Eminis are currently trading 2900. With a $50 per point value, this means that a single contract controls $145000. With a $500 intraday margin, you are trading at 290:1 leverage. This is dangerous, and not much different than OTC forex dealers who offer similar levels of leverage. If you actually maximize $500 margin per contract, you *will* blow up. It *will* happen (not saying that you do emini83, just speaking in general terms).

There's a *reason* that CME outright margin on the ES is $6000. That's 25:1 leverage, an already low 4% of the contract value. I personally trade 1 emini per $10000. Doing so means an 8 tick loser yields a 1% loss. Do you really want to lose more than 1% on a single trade, especially given that 8 ticks is quite small? Trading at $500 margin means you can hold 20 ES with per $10000, which means that a single 8 tick loser (not a hard feat to accomplish really) yields a *20% loss* !!

I'm passionate about this, because I have traded overleveraged before, and it's a fool's errand. Even if you win on any given trade, you still lose in the long run -- it's a probabilistic certainty (see "risk of ruin"). I have blown up, damaged myself emotionally, and had to claw my way back to sanity. Please, please, be sensible and stay closer to the guidelines that the exchange sets -- it's for your own protection.

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  #200 (permalink)
 tpredictor 
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@josh

I think you have some valid points. But, the lower margin is actually useful when you have multiple working orders. Many brokers require margin for any open order. So, if you have a position open then you get -$500, stop -$500, and not sure if the limits also require margin but that's another $500 (if they do). But with just the stop, that is $1,000 or double what it appears. At any rate, if you open a trade with $150 stop then your effective leverage is going to be more then they are giving you on that trade, at least.

If you have an edge with a 3 point stop on the ES and have a 10k account, and you want to risk 3% per trade, you could even place 2 contracts on that trade. Now on the other hand, if you want to place a swing day trade that needs $500 risk then that's 5% risk even with 10k account and you either have to take more then 3% risk or skip the trade. This is why most small futures accounts will either go to zero or gain at least 100% because the "gearing" makes it almost inevitable.

As an aside, it is not the leverage that makes futures so difficult to trade-- it is the lack of granularity. People confuse this all the time and think high leverage is what causes traders difficulty. Leverage is not the problem. It is the lack of granularity.

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