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Micro ES SP500 contract "coming" (E-Micro)
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Micro ES SP500 contract "coming" (E-Micro)

  #51 (permalink)
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Too early imo.

They were taking the pulse the way I understood it, could be quite a while before any result.

But if FT has more news or insight hopefully he can share.

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  #52 (permalink)
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Jura View Post
Would be interesting to hear if there's an update on this. Given that the CME hasn't announced anything in the last month and a half (not even a launch date months in advance), I can't help but think that FuturesTrader71 spoke a little bit too soon.

I imagine that if the CME has decided internally to launch a micro ES contract and communicate this to brokers, an official announcement would be made sooner than later. At least, I hope they are technologically savvy enough to copy an existing product within two months.

I would understand why the CME has attempted to try and do emini currencies, because of the large FX cash biz that they might consider a competition. This has proved to be a useless exercise, BTW.

However, with the popularity and liquidity of the ES, I have no idea what would be the incentive of the CME for such a product like micro ES, especially when they have no competition around for such a thing.

Lastly, the CME is there first and foremost to serve the institutional clientele.
I don't think their priority is to create additional retail products because their minis (outside the indicies) don't gain the anticipated liquidity.

Having said everything above, I could be wrong and these are only my thoughts.

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  #53 (permalink)
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Big Mike View Post
Too early imo.

They were taking the pulse the way I understood it, could be quite a while before any result.
(..)

Ah I see, then I misunderstood. I figured the 'coming soon' implied they're already working on it (at least a little bit), but it was more an informal poll it seems.


mattz View Post
(...)
However, with the popularity and liquidity of the ES, I have no idea what would be the incentive of the CME for such a product like micro ES, especially when they have no competition around for such a thing.

Lastly, the CME is there first and foremost to serve the institutional clientele.
I don't think their priority is to create additional retail products because their minis (outside the indicies) don't gain the anticipated liquidity.
(...)

That's true Matt.

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  #54 (permalink)
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mattz View Post
I would understand why the CME has attempted to try and do emini currencies, because of the large FX cash biz that they might consider a competition. This has proved to be a useless exercise, BTW.

However, with the popularity and liquidity of the ES, I have no idea what would be the incentive of the CME for such a product like micro ES, especially when they have no competition around for such a thing.

Lastly, the CME is there first and foremost to serve the institutional clientele.
I don't think their priority is to create additional retail products because their minis (outside the indicies) don't gain the anticipated liquidity.

Having said everything above, I could be wrong and these are only my thoughts.

In a webinar on financialjuice.com this week, FT said recently it was slow going.

Question for you Matt: How do you think it would impact your biz?

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  #55 (permalink)
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bob7123 View Post
In a webinar on financialjuice.com this week, FT said recently it was slow going.

Question for you Matt: How do you think it would impact your biz?

Could you be more specific? If you mean the actual micro lots have become real?
It would have zero impact, as it would have no liquidity, but a great tool for guys with little funds who want to play around throughout the day.

Contracts have to make sense. for example, let's say the ES, notional value is $85K (rounding up 1700x50 a point)
And the average comish is around 1 per side plus exchange, etc
So now you buy a basket of $85K that you bought under 5 bucks.
This would make a good hedging tools, a good spec tool, etc
So the notional value and pricing of a contract has to make sense otherwise
the product does not take off.

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  #56 (permalink)
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mattz View Post
Could you be more specific? If you mean the actual micro lots have become real?
It would have zero impact, as it would have no liquidity, but a great tool for guys with little funds who want to play around throughout the day.

Contracts have to make sense. for example, let's say the ES, notional value is $85K (rounding up 1700x50 a point)
And the average comish is around 1 per side plus exchange, etc
So now you buy a basket of $85K that you bought under 5 bucks.
This would make a good hedging tools, a good spec tool, etc
So the notional value and pricing of a contract has to make sense otherwise
the product does not take off.

Yes, that is what I mean.

That is an interesting perspective, not one that I expected. My thought was that it could be helpful to you. With an extra rung at the bottom of the ladder, more of us little guys would be better able to graduate to bigger players.

From my perspective, smaller contracts would help to linearize the situation. If I were day trading stocks, I could trade anywhere down to a single share and gradually move up as my psychology & risk management plan allowed. Not so much with futures. Also if I were a medium sized payer, realizing that is a subjective term, I could hold positions longer without losing sleep.

I should add that there is a cost to micro contracts besides the sometimes wider spread. If I have a scaling strategy, that multiplies the number of contracts I need by 3 or 4 off the bat, and if I start to work my size towards a full ES or 6E strategy, that's a whole lotta contracts. For the same delta, I'm paying a lot more. The exchange linearizes their fees (their fee for M6E is 1/10 6E) but so far the all in prices I see are higher. If you look at the commission per trade, someone is making some money on those little contracts.

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  #57 (permalink)
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Micro Index Futures

Hello,

Will there be any type of smaller index futures contracts coming soon? Perhaps a Micro contract?

As we know, the mini contract is of somewhat a substantial size right now (SP500 Value 2035 x $50 a point = $102,000 contract)

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  #58 (permalink)
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nope -- and if there were, the liquidity would be awful .. just look at some of the other micros

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  #59 (permalink)
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It would be helpful to aspiring traders such as myself if the CME would offer an S&P 500 micro, but understand their concern about liquidity.

One reason micro futures may be less popular than expected is due to competition with retail sized commodity and stock index CFDs. Traders can use these to improve their skills before "moving up" to full size futures contracts. I understand these instruments are popular in Europe and Asia. Unfortunately CFDs are not available to US residents due to securities regulations. For example, Interactive Brokers offers a suite of global stock index CFDs with notional values in the 10-20K range, but US residents are banned from using them.

I think it would be advantageous to both traders and the futures exchanges if this ban were finally lifted. That way newbie traders here in the USA would have access to the smaller contracts they need for proper risk management. Meanwhile the CME could eliminate their unsuccessful micro futures offerings and focus on professional traders and institutional clients.

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  #60 (permalink)
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Totally agree with Schultz15.Here I can trade eminis CFD just from 1 USD per whole index point.Adding new contracts make no sense for 90 % of traders.As Eurex and KRX do it recently... it also not change too much.Of course it is some kind of success -25k for Kospi 200 Mini and 10k for Fdax mini is very good... but also volume of ,,big'' brother are decreasing becouse some traders migrate there - and that NOT attract new player's.From exchange and brokers poing of view it not provide anything new,its just complicate bussiness.
Lift that strange ban on CFD or trade SPY with margin - then migrate to ES.Simple as that

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