ES TRADERS: Interested In Tick Size Change?

Should the CME Change The S&P 500 EMINI Tick Size to Dimes Like the Pit Contract?

  • Yes!

    Votes: 27 61.4%

  • No.

    Votes: 17 38.6%
  • Total voters
    44
Quote from increasenow:

Something is missing here...who cares about the range when you can trade 10 contracts and make $500 with just ES Point gained...the ability to scale up in the ES is key
More...

Unless the tick size change led to a margin requirements change, you would still be able to do that if the tick size changed to .1 rather than .25. The only difference is that 1 ES point would be 10 ticks rather than 4.
 
Quote from logic_man:

Unless the tick size change led to a margin requirements change, you would still be able to do that if the tick size changed to .1 rather than .25. The only difference is that 1 ES point would be 10 ticks rather than 4.
More...

Yes, exactly. In fact if this tick size did change, it would be easier to move through bids and offers, there fore we may actually see MORE movement than with quarters. A one point move in quarters from 1181-1182 might be 1181-1182.10 in dimes, therefore allowing you to squeeze out another $50 in the trade. This happens all the time in the pit contract, allowing it to be arbed.
 
Quote from Handle123:

When I started day trading the big S&P500 in 1985, it traded in nickels at $25 a tic, daily range was 2-4 points. You needed $25,000 to day trade it and had to call broker who called the floor for your order. You simply learned how to trade and became a better all around trader.

Just cause the trends are not like they were back a couple years, good traders learn to adapt. Or go to crude oil, that sucker moves big time and trades in pennies. The 6E runs well for big moves.

You can always go to a smaller timeframe and trade more contracts.

You are right, I would like a change of going back to what it was 25 years ago, didn't have so many whipsaws like now, market flowed better, today, too many underfunded traders get to play the game which causes stops to be run. Like shooting fish in a barrel, LOL.
More...
traded in nickels with a 3 point range,much easier than today
 
Quote from julian0625:

This happens all the time in the pit contract, allowing it to be arbed.
More...
and maybe this is the reason it wont change. why would pit traders (people who are probably good friends with the guys running the show) give up an edge like that?
 
Dropping that to 10 cents from 25 cents means a need to drop the commission for retail to at least 1/2 of the current going rate.

I used to pay retail rate and that is an important factor to consider if you stay retail on size.
 
One measure of the cost of trading is the commission/tick size dollar. This measure shows how expensive it is to trade a market. Larger tick sizes may make it easier to overcome the commission. But, also require larger accounts to trade.

I would prefer a model that scales commission to the dollar amount. this would make it much easier to scale up a trading system or test it with less capital.

Granularity, Liquidity/Scalability, Trading Hours.. a lot goes into what makes a great market. I feel the ES is still one of the best markets. But, the capital requirements make it unfeasible for most retailers.

Personally, I would not want to see the ES changed at all as it would make historical testing more difficult. I would like to see a new product based on the ES that has a cost structure more like Forex. I am currently trading NADEX products for that reason.

Even so, they have some limitations that make it more difficult.

Quote from julian0625:

I started trading the ES back in the early 2009 era, coming out of the decline of 08'. Back then, the S&P emini was still very volatile, and it was normally moving through ticks and levels very quickly.

However, as volatility has declined, the ranges in the S&P emini have also contracted, making it hard to move through bids and offers because of the HUGE liquidity the emini has. This makes it harder for breakouts to happen, and allows for more frequent stop runs.

Now, I LOVE trading the ES, but on days of low volume like last week, the ES just feels like it is wading slowly through a huge puddle of mud...

The s&p pit traded contract trades in dimes (0.10, or 10 ticks a point). And therefore as much larger ranges in terms of ticks.

So my suggestion is I guess, why don't we change the emini's tick size to 0.10 like the pit traded contract? We would see more volatility, and better price discovery!

This would also allow for better spreading between the NQ and YM because of the similar tick sizes, bringing more volume into those contracts as well!

The s&p emini has enough liquidity to transition to a different tick size, and I think it would bring benefit to the exchange, volume wise, as more speculators would play the market, as more volatility would be created.

So all you ES traders! What do you think? Remember, the NQ tick size used to be halves, but because of CUSTOMER DEMAND, they changed it to quarters.

If traders are for this, we could create a petition of sorts and potentially change the emini for the better!!!

Post your thoughts and vote!
More...
 
Quote from Elitist Trader:

and maybe this is the reason it wont change. why would pit traders (people who are probably good friends with the guys running the show) give up an edge like that?
More...

To be honest, I don't think it would change pit-emini arb that much. For example if the pit is 1120.10 bid at 1120.50 offer, and the emini is 1120.30 bid at 1120.40 offer, some one would still be able to over cut the bid in the pit and immediately sell the bid in the emini. There should be no difference.
 
The problem with the ES is the $50 multiplier. Note that the ES options trade in 0.05 ($2.50) ticks.

What we really need is an electronic S&P 500 contract with a $500 multiplier and a 0.01 ($5) tick. Plenty of tick noise and commission efficient.
 
You must log in or register to reply here.
Back
Top