and they need to come up with a catchy name. a/c/e just doesn't cut it. Now leave out the slash marks and capitalise it, and you have the ACE. (Then all they would need is to invent some kind of exclusive order, like a limit with a stop and a target and call it a flush, and if you wanted to place a market with a stop they could call that "jokers wild."
DOW Mini's....who'da thunk it
- Thread starter stevieoh
- Start date
CaroKann wrote:
"i dont trade the dow minis, but a few things came to mind. first, even though the dow mini is $5 per point, the dow is 10x the s&p numerically. glancing at a dow chart, looks like it moves about the same as the s&p in a day. however, given a mini dow margin of $1350 intraday, compared to about $2000 for spoos, that's more $$ fluctuation for the mini dow. i.e. more $$ volatility in your account if you were fully margined in dow minis vs spoos. it looks like you get more effective leverage with the dow since, fully margined, your account will have greater gains/losses.. the only downside would be the fact that you need more dow contracts to trade, increasing commissions. am i wrong on this?"
My first impulse is to agree that more contracts/higher commisions would be necessary - IF one was to attempt to look for $50 per point on the DOW minis. BUT, since the DOW moves 10x more than the spooz, thats not the way I personnaly would look to trade them.
Actually, a swing trade on YM for the day with 2 contracts would be worth the extra five bucks commisions vs one ES contract.
If you did nothing today other than short at open and cover at the close, 2 contracts on YM netted you $965.00 or $955 after commisions vs one contract on ES $950 or $945 after commisions. Naturally, I am sure there are days that the DOW moves more or less than 10x the ES.
It seems like it should be easier to enter a position within 20 or 30 DOW points vs 2 or 3 ES points .........maybe it just seems that way. Of course too, at least with the ES you are assured of a set exit which, unlike the DOW, your exit might be worse than hoped for due to spread/illiquidity.
But still, for those with smaller accounts and/or a time frame longer than minutes, I think the DOW minis offer a pretty decent alternative.
"i dont trade the dow minis, but a few things came to mind. first, even though the dow mini is $5 per point, the dow is 10x the s&p numerically. glancing at a dow chart, looks like it moves about the same as the s&p in a day. however, given a mini dow margin of $1350 intraday, compared to about $2000 for spoos, that's more $$ fluctuation for the mini dow. i.e. more $$ volatility in your account if you were fully margined in dow minis vs spoos. it looks like you get more effective leverage with the dow since, fully margined, your account will have greater gains/losses.. the only downside would be the fact that you need more dow contracts to trade, increasing commissions. am i wrong on this?"
My first impulse is to agree that more contracts/higher commisions would be necessary - IF one was to attempt to look for $50 per point on the DOW minis. BUT, since the DOW moves 10x more than the spooz, thats not the way I personnaly would look to trade them.
Actually, a swing trade on YM for the day with 2 contracts would be worth the extra five bucks commisions vs one ES contract.
If you did nothing today other than short at open and cover at the close, 2 contracts on YM netted you $965.00 or $955 after commisions vs one contract on ES $950 or $945 after commisions. Naturally, I am sure there are days that the DOW moves more or less than 10x the ES.
It seems like it should be easier to enter a position within 20 or 30 DOW points vs 2 or 3 ES points .........maybe it just seems that way. Of course too, at least with the ES you are assured of a set exit which, unlike the DOW, your exit might be worse than hoped for due to spread/illiquidity.
But still, for those with smaller accounts and/or a time frame longer than minutes, I think the DOW minis offer a pretty decent alternative.
If you did nothing today other than short at open and cover at the close, 2 contracts on YM netted you $965.00 or $955 after commisions vs one contract on ES $950 or $945 after commisions. Naturally, I am sure there are days that the DOW moves more or less than 10x the ES.
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2 contracts on YM would be $1965/$1955 - a MUCH better return....sheesh, can't spell, can't add lol
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2 contracts on YM would be $1965/$1955 - a MUCH better return....sheesh, can't spell, can't add lol
"2 contracts on YM would be $1965/$1955 - a MUCH better return...."
Yes. But when you attempt to move to higher avg contracts per trade the YM liquidity will limit you and you will end up back at the ES or NQ.
I really hope they get this contract going. The news (mentioned in an earlier post)about additional market makers sounds great. Hopefully the CBOT will be aggressive in marketing the product.
there is no point to trade the $5 dow - its equivelant in value to the S&P mini - but the $5 dow does not have such a narrow and consisitent spread as the S&P emini
very occasionally on the $5 dow you can get a point spread, but mostly its around 4/5pts widening out 8/10pts when the market is undecided on its next move
the spread does not change as such on a fast move, but due to the lack of liquidity, the $5 dow immediatly goes to the next key support or resistance level - so it is real hard to control your losses
someone on elite said it was no use for scalping, but ok for taking a longer term position - but i guess they were forgetting the cost of establishing that long term position
basically there is no reason to trade the $5 dow, until the spead can be maintained at 2.5 to 5 points, and they're is enough liquidity to provide acceptable slippage - and it is no way close to this now
there are ways to take advantage of its inefficiencies, but ultimatly the work involved relative to the opportunities is not worth the hassle - better to stick with the cme emini indexes
but, if you really want lower cost, narrow consistent spreads and excellent liquidy with little slippage and low commisions - go for the eurostoxx 50 and maybe look at the various stoxx sector indexes as their liquidiy rises and falls with the cyclical sector preferences
cartm
there is a lack of liquidity because there is a lack of liquidity - have u heard of catch22
it'll take some serious hedging volume to come into it before traders can start utilising it
more market makers is fine, but if they all widen the spread at the danger times - the same problem will exist
very occasionally on the $5 dow you can get a point spread, but mostly its around 4/5pts widening out 8/10pts when the market is undecided on its next move
the spread does not change as such on a fast move, but due to the lack of liquidity, the $5 dow immediatly goes to the next key support or resistance level - so it is real hard to control your losses
someone on elite said it was no use for scalping, but ok for taking a longer term position - but i guess they were forgetting the cost of establishing that long term position
basically there is no reason to trade the $5 dow, until the spead can be maintained at 2.5 to 5 points, and they're is enough liquidity to provide acceptable slippage - and it is no way close to this now
there are ways to take advantage of its inefficiencies, but ultimatly the work involved relative to the opportunities is not worth the hassle - better to stick with the cme emini indexes
but, if you really want lower cost, narrow consistent spreads and excellent liquidy with little slippage and low commisions - go for the eurostoxx 50 and maybe look at the various stoxx sector indexes as their liquidiy rises and falls with the cyclical sector preferences
cartm
there is a lack of liquidity because there is a lack of liquidity - have u heard of catch22
it'll take some serious hedging volume to come into it before traders can start utilising it
more market makers is fine, but if they all widen the spread at the danger times - the same problem will exist
stevet
I understand the hedging and arbing aspect but when the sp and naz minis came out there had to be the same issues, question is, how and why did these become liquid, and can the dow minis do the same, does it have anything to do with the cme vs the cbot marketing, and if so to what degree. liquidity precipitates liquidity, but the minis must have had the same issues. later
I understand the hedging and arbing aspect but when the sp and naz minis came out there had to be the same issues, question is, how and why did these become liquid, and can the dow minis do the same, does it have anything to do with the cme vs the cbot marketing, and if so to what degree. liquidity precipitates liquidity, but the minis must have had the same issues. later
The YJ and YM contracts in the last few weeks
the liquidity is not there yet , especially in the YJ
but what I sometimes do if I do not like the way
my position is going ... is to hedge by reversing
in the other contract and then unwinding
as it goes my way ... this is perhaps not
suitable to most traders , but I find sometimes
I must do this as the bids drop or offers
back away.
I sometimes find that there is an electonic order
pegged to match or better my high bid or low offer
I find this very annoying , but part of the game ...
perhaps the next time I will go high bid a few times
and then cancel my bid and hit the best bid that matched
mine.
the liquidity is not there yet , especially in the YJ
but what I sometimes do if I do not like the way
my position is going ... is to hedge by reversing
in the other contract and then unwinding
as it goes my way ... this is perhaps not
suitable to most traders , but I find sometimes
I must do this as the bids drop or offers
back away.
I sometimes find that there is an electonic order
pegged to match or better my high bid or low offer
I find this very annoying , but part of the game ...
perhaps the next time I will go high bid a few times
and then cancel my bid and hit the best bid that matched
mine.
cartm
hedging and arbing are what will provide the underlying liquidity and then all of a sudden a certain threshold will be reached and some traders will come in at certain high volume parts of the day, and this will gradually spread and then all of a sudden it will be a high liquidity product
but at this time its not worth it - why bother when you have the sweet dream of the emini s&p, backed up with the nasdaq, eurostoxx 50, ftse and dax
there are no medals for trading low liquidity - just empty wallets!
hedging and arbing are what will provide the underlying liquidity and then all of a sudden a certain threshold will be reached and some traders will come in at certain high volume parts of the day, and this will gradually spread and then all of a sudden it will be a high liquidity product
but at this time its not worth it - why bother when you have the sweet dream of the emini s&p, backed up with the nasdaq, eurostoxx 50, ftse and dax
there are no medals for trading low liquidity - just empty wallets!