ES TRADERS: Interested In Tick Size Change?

[Algo_Design_Kid]

Quote from julian0625:

Yes I agree about the market will trend as much as it will trend, however look at the TF. You can see because of the smaller tick size, it DOES tend to over shoot sometimes, meaning the possibility of an extra tick here and there.

It would bring more volume to the market, and it should bring more bids and offers.

Personally, I still believe that the big boys would be able to work around the spread, and even potentially get another nickel instead of the previous tick size.

They have algorithms to do this. Plus, the average size on the inside bid and offer in the mini is about 300-800. So if the tick size would be split, adding the extra liquidity it would create, you should see 200-500 at the inside bid and offer. If the big boys need to fill 1000 contracts, they should be able to work it around 2 ticks, giving them a potentially better fill.

The only reason I would imagine that they haven't changed it is because of the pit. Many of the pit traders are in ties with the board of the CME and that is probably the reason why the emini hasn't switched. Once the pit is gone, we should see the tick size decrease to replace it.

Just my 2 cents.

There are at least 2000 x 2000 contracts in EMini during regular trading hours.

Personally I think problems would arise using strategies that utilized .25 tick and had to switch to a smaller one. This would obviously be most apparent in smaller timeframes.

 

[julian0625]

Why don't they merge the S&P 500 pit with the emini. For example, change the quarter tick to dimes, and double the contract size to accommodate both players.

So instead of a $50 or $250 multiplier, we could have $100.

Volume in the ES has been declining/flatlining since 2008. We need some sort of change in the contract to bring more volume back in. The smaller the tick, the more arb, the more opportunity, therefore more volume.

VOTE!

 

[Handle123]

Quote from julian0625:

Why don't they merge the S&P 500 pit with the emini. For example, change the quarter tick to dimes, and double the contract size to accommodate both players.

So instead of a $50 or $250 multiplier, we could have $100.

Volume in the ES has been declining/flatlining since 2008. We need some sort of change in the contract to bring more volume back in. The smaller the tick, the more arb, the more opportunity, therefore more volume.

VOTE!

I certainly would favor that, but thinking most small traders prefer the $500 margin. I liked it better in good old days where each nickel was $25.