CME e-micro futures

Why can't the exchanges allow _fractional_ trading of contracts instead of introducing separate mini or micro contracts that can't benefit from larger pools of liquidity? Fractional contracts--for example you could by and sell 1/10th of a 6E contract, though commissions would have to be proportionately smaller as well. By increasing the granularity of the contracts one would expect volume to increase, maybe dramatically, as bid/ask spreads and liquidity would already be there to pull retail traders into futures. So why create mini or micro contracts where nobody wants to be the first one on the dance floor? Why not just allow or introduce fractional trading of existing contracts? In fact this might help bid/ask spreads to narrow more, no?

Good idea or idle foolishness? Am I missing some obvious reason that this wouldn't work?
 
I did some swing trades in M6A, M6E, and M6C with limit orders.......worked out fine, but not enough liquidity for day trading. They might still catch on as time goes by. Stosh
 
Quote from day4night:

Why can't the exchanges allow _fractional_ trading of contracts instead of introducing separate mini or micro contracts that can't benefit from larger pools of liquidity? Fractional contracts--for example you could by and sell 1/10th of a 6E contract, though commissions would have to be proportionately smaller as well. By increasing the granularity of the contracts one would expect volume to increase, maybe dramatically, as bid/ask spreads and liquidity would already be there to pull retail traders into futures. So why create mini or micro contracts where nobody wants to be the first one on the dance floor? Why not just allow or introduce fractional trading of existing contracts? In fact this might help bid/ask spreads to narrow more, no?

Good idea or idle foolishness? Am I missing some obvious reason that this wouldn't work?
More...

Awesome idea. I would be in heaven if I could trade 1/10 ES.

There's an Australian broker that will do it but they won't accept American accounts.
 
Quote from day4night:

Why can't the exchanges allow _fractional_ trading of contracts instead of introducing separate mini or micro contracts that can't benefit from larger pools of liquidity? Fractional contracts--for example you could by and sell 1/10th of a 6E contract, though commissions would have to be proportionately smaller as well. By increasing the granularity of the contracts one would expect volume to increase, maybe dramatically, as bid/ask spreads and liquidity would already be there to pull retail traders into futures. So why create mini or micro contracts where nobody wants to be the first one on the dance floor? Why not just allow or introduce fractional trading of existing contracts? In fact this might help bid/ask spreads to narrow more, no?

Good idea or idle foolishness? Am I missing some obvious reason that this wouldn't work?
More...

Agree, fractional lot sizes in Forex is making it so much easier for me to step in water and splash around.

Using the right platform anyone can trade anywhere from $0.10/pip on up to multiples of $10.00/pip.

Not sure if fractional contract sizes in futures would attract new customers but I would have never stepped into Forex without fractional capabilities.
 
Quote from mtwokay:

Agree, fractional lot sizes in Forex is making it so much easier for me to step in water and splash around.

Using the right platform anyone can trade anywhere from $0.10/pip on up to multiples of $10.00/pip.

Not sure if fractional contract sizes in futures would attract new customers but I would have never stepped into Forex without fractional capabilities.
More...

My sentiments exactly. Stosh
 
Quote from IronFist: There's an Australian broker that will do it but they won't accept American accounts.
More...

you'd be trading against that broker. there is no standard futures contract for 1/10 ES

to those asking about fractional... exchanges use standardized contracts. there are conventions in the interbank which developed as a matter of course, but not standardized contracts traded at one central location
 
Still no volume, but not due to the lack of effort by the CME to virtually outlaw spot fx. Who do you think was behind the recent push to limit cash leverage to 10:1 while the mini's and micro enjoy about 40:1 leverage?
 
You must log in or register to reply here.
Back
Top