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The exchange already makes money on transaction fees, so a fixed spread between the bid and ask is only justified if there is a liquidity provider making a market.

Yea. They called it club 3000 because all the systems for sale seemed to be priced at $3000. Back before forums. What ever happened to Rick Ratchford?

The RUT tick is .10 vs .05 for the pit. ES tick is .25 vs. .10 for pit. The tick differential is wider for the ES/SP and the SP pit has historically been more active than the Russell pit. Arbs can make more on the ES/SP and they have more confidence they can unload the other side in the pit...

YM's biggest problem is lack of native stop limit orders. As a result you can get massive slippage on breakouts. Not very friendly for swing or position traders. ER2 is the best bang for the buck as mentioned. NQ will get better once it recovers from the tech bubble. ES - the tick is...

I meant margin was the same regardless of tick size, not that margin on the big contact was the same as the ES. The mini-dow doesn't have native stops last I checked, so it would trade different from the CME indexes IMHO and not be a good comparison. To cut to the chase - I think the best...

CME Logic Here is a comparison of three CME index products. I wonder, do they use a Weejee board to come up with these tick sizes or are they solely driven by the political strength of each pit? NDX - weak pit - increments laid out logically Pit $100 per point. tick...

I don't see how setting the tick at $12.50 makes the ES trade like a contract 1/2 the size or how this is an advantage or even relevant. Margin is still the same, you are just paying more in fat tick slippage. If stop limit orders fill all the available bids for the next few levels, then...

I'll grant you that there is an optimal tick size and too small a tick may not be the answer. Bear in mind however, that the pit contract for the SP is 5 times the value of the ES. So a .10 increment for the pit contract would be equal to a .005 tick increment in the ES versus the current .25...

Ha, funny. Then why is the tick size for the pit set at .10?

If they reduced the tick size it would probably increase the amount of contracts traded. This would increase CME profits as most of their revenues come from transaction fees. So it would seem that the CME is sacrificing company profits to appease a small cabal of pit trading arbitrageurs...

:D The priority for change at the CME is as follows, in this order: 1.) Profits for the company. 2.) Satisfying political demands of pit traders for special privileges. 3.) What the majority of non-member traders want. If the ES emini traded in .10 tick increments like the SP pit...

When the CME came out with the E-mini ES contract, the pit was against it. So the management threw the pit a bone making the ES contract with a .25 point tick increment (1 point equaling $50). The pit contract continued to trade in .10 increments. This allows them to have easy arbitrage...

The tick increment is artificially set too wide on the ES, so you can say that you experience slippage on every trade. E.G. - the ES tick is .25, it should be .10 - so you experience slippage of .15 on every trade.

Is this for a swing/multiday trade?

I wonder how long it will be before the CME is sued for unequal treatment of shareholders. A publicly traded company like the Chicago Mercantile Exchange can't rig a sweetheart arrangement for some shareholders (pit traders) that comes at the expense of other shareholders (non-pit). This...

ES is used for price discovery - SP follows. Not only is the pit a useless appendage but it is actually an inhibitor of true price movement for the S&P. The pit contract trades in .10 increments. The mini (ES) was set at .25 in order to give a political sop to helpless pit "traders" who can...

Think of "the floor" as a feather bedding union and then it all makes sense. Sort of like the electricians union at the McCormack Place that bans exhibitors from plugging in their own electric wires into standard outlets.

No native stop limit orders - anyone who enters or exits based on a breakout gets ripped-off with massive slippage. As a result, the longer term players avoid this instrument and all you have is the scalpers scalping against each other.

The CBOT YM didn't used to allow stop limit orders which meant slippage on any breakout trade. I don't know if this is still true, but I did not trade it because of that.

You are correct. The asians in S. Cal. I met were all nice people, model citizens and law abiding. That being said, California might end up like Hawaii - too expensive and white guys like me feeling too in the minority. A nice place to visit, but not to stay. SoCal has changed so...