A performance bond DECREASE from the CME on indices?

nooby_mcnoob said:
Surprising they would decrease it given the increase in volatility but I guess the increases were enough of a buffer in the past.
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Yes. In the NQ, the current level of margin we have been under was implemented during the March 2020 clusterfuck. We have maintained very wide ranges since then, so I was surprised to see a decrease NOW, especially after the FOMC is full-steam-ahead on tightening. That always messes with the NDX and NAZ.

And why the increase in cash butter future margins? I realize it is a new contract, but what has been going on in that space, and what does the CME risk department forsee in the near future to warrant that change?

Higher cow-abduction by aliens, leading to less milk supply? A mystery for sure.
 
nooby_mcnoob said:
Surprising they would decrease it given the increase in volatility but I guess the increases were enough of a buffer in the past.
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There is also SOME degree of behavioral "incentivizing" associated with performance bond amounts. Requiring less or more to hold contracts is a big deal!... affects sizing and overall strategies used. However, it's not really applicable to day-trader clientele using firms catering to day-trading (like many here, including me) with reduced day-trade margin/performance bond.
 
tiddlywinks said:
There is also SOME degree of behavioral "incentivizing" associated with performance bond amounts. Requiring less or more to hold contracts is a big deal!... affects sizing and overall strategies used. However, it's not really applicable to day-trader clientele using firms catering to day-trading (like many here, including me) with reduced day-trade margin/performance bond.
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Yep this is what I was thinking as well. NQ book is very thin relative to ES, volume is moving to micros.
 
nooby_mcnoob said:
Yep this is what I was thinking as well. NQ book is very thin relative to ES, volume is moving to micros.
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ES has 2 or 3 times the volume as NQ. Therefore you would expect the NQ book to 2 or 3 times as thin based on just this fact.

However the NQ daily range in pts is about 6 times larger than the ES. Therefore you would expect the NQ book to be 6 times thinner than the ES given this fact.

Combing both the above effects I would expect the NQ book to be 12 to 18 times thinner than the ES book.


Or to put it another way: If the volume in NQ tripled to match ES and daily range on NQ collpased to 50pts to match ES. I would expect the NQ book to be just as thick as ES is currently.
 
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Millionaire said:
ES has 2 or 3 times the volume as NQ. Therefore you would expect the NQ book to 2 or 3 times as thin based on just this fact.

However the NQ daily range in pts is about 6 times larger than the ES. Therefore you would expect the NQ book to be 6 times thinner than the ES given this fact.

Combing both the above effects I would expect the NQ book to be 12 to 18 times thinner than the ES book.


Or to put it another way: If the volume in NQ tripled to match ES and daily range on NQ collpased to 50pts to match ES. I would expect the NQ book to be just as thick as ES is currently.
More...

Get outta here with your facts!
 
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