Change the tick increment in ES from 0.25 to 0.1

[wareco]

Correct me if I am wrong. With the ES at .10, each tick would be $5.00/contract. So, to make $50, the ES would have to move 10 ticks or 2.5 points. Is the daily range for the ES really going to expand by 2.5 times to make up for the change in tick size? I doubt it. Why would it? It's still going to be closely tied to the SP. The number of contracts trading is not going to expand 2.5 times. Buyers aren't going to need to buy 2.5 times more contracts, and the same for sellers.

On the contrary, the daily range would decrease. Now, to buy 2000 contracts at the market might cost me a premium of .25 for the first 1000, and .5 for the second 1000. With ES at .10, it would cost me .10 for the first 1000 and .20 for the second. I got my order filled and I moved the market less. So, as I see it. If the ES moved to .10. I'm going to make less money, or I'm going to have to trade more contracts, and pay more fees and commish.

Keep the ES at .25. And for god's sake don't even think about .01. The last thing I want is some joker jumping in front of me for a penny with a 500,600,700 lot order. He can go to the back of the bus where he belongs.

 

[SethArb]

oops ... looks like either I am up way past my bedtime or your calculations are off.

.10 X 10 ticks = 1 handle = $5 X 10 = $50.00

-Correct me if I am wrong. With the ES at .10, each tick would be $5.00/contract. So, to make $50, the ES would have to move 10 ticks or 2.5 points-

 

[Bitstream]

Yep I guess he got a bit

 

[Bitstream]

Can you tell me why you should pay .20 for the second lot with .1 tick and .5 for the second lot for .25 tick?

Im definetly up past my bedtime....

 

[wareco]

Quote from SethArb:

oops ... looks like either I am up way past my bedtime or your calculations are off.

.10 X 10 ticks = 1 handle = $5 X 10 = $50.00

-Correct me if I am wrong. With the ES at .10, each tick would be $5.00/contract. So, to make $50, the ES would have to move 10 ticks or 2.5 points-

ES is $50/point
4 ticks/point
$50/4 ticks = $12.50/tick

With ES at .10/tick
$50/10ticks= $5.00/tick

 

[Bitstream]

Quote from wareco:

ES is $50/point
4 ticks/point
$50/4 ticks = $12.50/tick

With ES at .10/tick
$50/10ticks= $5.00/tick

Still you made a mistake: 10 ticks with .1 tick size is a full point not 2.5.

 

[wareco]

Damn, I'm not usually that slow. As Emily Latella used to say on SNL many years ago. "Never mind."

 

[Bitstream]

Sorry dude, no mean no offence....
Im probably the slow one not getting you did get it....

 

[version77]

Quote from velocity_trader:

I think it would be great if they took the contract size up to $100 per point and reudced tick increments to .1

Best idea I have seen yet... but...


1. Would it decrease the daily range compared to now?

2. Would it decrease daily volume compared to now?

3. Would it double intraday/overnight margin rates?

4. Would it have an effect on commissions?

5. Would it wipe out ER2? (Would ER2 traders go back to ES)...

What other possible negative/positve effects would this change
have that anyone can think of?

 

[nononsense]

Quote from version77:

Best idea I have seen yet... but...


1. Would it decrease the daily range compared to now?

2. Would it decrease daily volume compared to now?

3. Would it double intraday/overnight margin rates?

4. Would it have an effect on commissions?

5. Would it wipe out ER2? (Would ER2 traders go back to ES)...

What other possible negative/positve effects would this change
have that anyone can think of?

Don't worry about all this. Better make sure that part of your profits are no longer milked away by well connected big spread skimmers. ALL TICKSIZES SHOULD BE EQUAL BETWEEN ELECTRONIC & PIT for related issues. You'll at least be sure to be ahead already on this point.