CME equity micro contracts coming

Robert Morse said:
I would have prefered a Micro E-mini Future that is $25/point or 1/2 the emini. 1/10th is too small and commissions and fees will be too high to actively trade. Seems like the CME wants to attract those with very little and still want leverage. I'm not a fan.
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I found a statement which has the "typical" costs on micro-gold trading. I reckon the CME will implement similar pricing on the micro equities. Granted, this is nearly 3 years old, but I assume the pricing structure will be similar...

mgcnewmicros.jpg


I don't see the problem with costs, to be honest, considering the smaller exposure. You pay a little bit more in fees but expose yourself to less drawdown? I am a fan, for the simple fact that the lower barrier to entry and price action will eventually feed the larger markets with more liquidity.
 
Overnight said:
I found a statement which has the "typical" costs on micro-gold trading. I reckon the CME will implement similar pricing on the micro equities. Granted, this is nearly 3 years old, but I assume the pricing structure will be similar...

View attachment 198915

I don't see the problem with costs, to be honest, considering the smaller exposure. You pay a little bit more in fees but expose yourself to less drawdown? I am a fan, for the simple fact that the lower barrier to entry and price action will eventually feed the larger markets with more liquidity.
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What I'm seeing is $1.06 total. If this is round trip, and if the pricing will be similar, then this is about 1/4 cost for 1/10 size. Acceptable in my opinion. Having real world experience while losing $100 vs. $1000 in a day is much better, even if you paid an extra $20/30 for commissions.
 
They should have done 1/5th size of ES. That would have been equivalent to 100 shares of SPY with the better tax treatment and direct competition.
 
Seaweed said:
What I'm seeing is $1.06 total. If this is round trip, and if the pricing will be similar, then this is about 1/4 cost for 1/10 size. Acceptable in my opinion. Having real world experience while losing $100 vs. $1000 in a day is much better, even if you paid an extra $20/30 for commissions.
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Negative, that is one side. So $2.12 per round trip on the single contract. Granted, that is with the broker commissions, so take away $0.50 for the commish, and plug in your own broker's commish to come up with a true total for your situation. Even then, just over 2 bux is totally acceptable per RT, yeah.
 
Overnight said:
Negative, that is one side. So $2.12 per round trip on the single contract. Granted, that is with the broker commissions, so take away $0.50 for the commish, and plug in your own broker's commish to come up with a true total for your situation. Even then, just over 2 bux is totally acceptable per RT, yeah.
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Trouble is that $2 is now 4 ticks for MNQ. That is an entire point. For MES, you will need 2 ticks just to BE. If you look at long term stats, many traders will average 5-6 ticks profit per trade over hundreds of trades. If you take 2 ticks away, it really messes with your potential, and let's not even mention slippage.

I can see two benefits though. You start on this and move up as quickly as you can to the mini from this mucro, or you swing trade with it. Use much wider stops and plan to stay in a trade all day or 2 days.
 
Seaweed said:
Trouble is that $2 is now 4 ticks for MNQ. That is an entire point. For MES, you will need 2 ticks just to BE. If you look at long term stats, many traders will average 5-6 ticks profit per trade over hundreds of trades. If you take 2 ticks away, it really messes with your potential, and let's not even mention slippage.

I can see two benefits though. You start on this and move up as quickly as you can to the mini from this mucro, or you swing trade with it. Use much wider stops and plan to stay in a trade all day or 2 days.
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That is the point of the micro...Just scale up a tad. Add another contract, and do the math.
 
I think there is a place for a retail investor that is not day trading and can't get leverage on their own to swing trade these instead of SPY. No wash sales. MTM P/L. 1256 tax treatment. For active traders, these are too small.
 
I wonder if this is a direct response/reaction to the announcement of The Small Exchange, a futures exchange awaiting approval, primarily owned by the folks who own Tasty Trade? This is pure speculation on my part, just sorta wondering out loud. Back when they had the $2 YM, i traded a lot of it. i was bummed when it went buh bye. These days, you can get whacked really hard on small size when the HFT's sweep the market and you're on the wrong side of the street. :)
 
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