Change the tick increment in ES from 0.25 to 0.1

Would you like to see the tick increment in the ES changed from 0.25 to 0.1?

  • Yes

    Votes: 115 52.8%

  • No

    Votes: 61 28.0%

  • I don't care but wanted to click a voting button

    Votes: 42 19.3%
  • Total voters
    218
Quote from Lorenzo:

What about the Mini Russell ? 0.1 = 10 $....hmmm

I'd like 0.1 = 5$

Finally.....We could have a tradable book!

2/300,000 contracts per day

Any thoughts?

Lorenzo
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One of the problems that the CME faces with the E-mini contracts at the moment is the shere volume of information flowing through their servers. Reducing the value of a tick in the ER2 would probably increase that volume. Changing the tick size in the ES should theoretically not increase the number of contracts traded.

Actually I'm probably wrong about that last sentence. If people moved from the SP contract to the ES then the volume would increase in the ES if the tick size was changed. And people would probably do the switch because of the extra liquidity in the ES.
 
decimalization in equities versus es: profits in equities were going down anyway, because of the after-bubble effect. there are still stocks with relatively large tick size: SUNW / JDSU come to mind. only way to trade those is with rebates. on futures you don't have rebates but a centralized orderbook, making it extra-difficult to get good fills. now tell me again if you prefer a larger ticksize on ES?
 
I have to admit that I really don't know much about the 0.25 spread and I doubt that many traders do. I'm sure if someone is profiting from it, they don't want me to know. If the CME, some market maker or someone else is buying my ES contract from me and then selling it right away for a 0.25 point profit they're going to make sure that I don't know that. I'm sure I'd be looking a long time for the website that explains it all.

In Forex you can trade commission free but you'd have to be an idiot if you don't realize it's not really for free. Obviously your cost for each trade is the difference between the bid and ask.
 
Quote from guy2:

Do you think that the tick increment in the ES should be changed from 0.25 to 0.1? Would you like the tick increment to be changed?
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This is the same argument I heard and I used in the 90’s. The spread is good for trading. If the minimum tick size is changed the volatility will get to low to make a living. Then the argument is going to be that commissions are too high! Back in the day when we traded in fractions it was easer to make a living even at 2 cents a share commission. After decimalization the spread became so tight stocks were very hard to move. Yes you have less risk trading a instrument with a small spread BUT it also kills the risk to reward ratio because the commission bill gets to high!
 
Quote from BricksandMortar:

This is the same argument I heard and I used in the 90’s. The spread is good for trading. If the minimum tick size is changed the volatility will get to low to make a living. Then the argument is going to be that commissions are too high! Back in the day when we traded in fractions it was easer to make a living even at 2 cents a share commission. After decimalization the spread became so tight stocks were very hard to move. Yes you have less risk trading a instrument with a small spread BUT it also kills the risk to reward ratio because the commission bill gets to high!
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You're saying that low volatility is caused by small tick size. Why do I see the opposite happening? Take a look at after hours ES trading. The spread opens up to around 0.5 but there certainly isn't much volatility. I think what you're seeing is that the markets have changed a lot since the 90's. The volatility is less and the spread is tighter but that doesn't mean that one causes the other.
 
Quote from nononsense:

My experience is the opposite. Of course you have many kinds of 'discretionary' traders.
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Doesn't your discretionary trading have a positive expectancy?
 
Quote from Sam Mcgee:

Here's an article talking about bid ask spreads:
http://faculty.haas.berkeley.edu/odean/papers/Bloomberg/BloombergArticle.htm

Basically the bid ask spread for retail traders is an expense in addition to the commission. Why would anyone want to increase that expense?
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Because the smaller minimum tick size means smaller profits.
As far as paying the spread, unless you trade forex, you are not locked into paying the spread, you are a part of the auction.
 
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