FairX Announces New Futures Exchange for Retail Investors

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Sig said:
Curious how this is any different from the "Small Exchange" (https://www.elitetrader.com/et/threads/small-exchange-kickoff.344972/page-4) which hasn't seemed to have gone much of anywhere since their launch last year. Looks like they're at a few thousand contracts traded per day, which given the contract sizes is miniscule.
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There are quite a few exchanges with low volume
and they still survive.


let's see how the FairX volume will be.
 
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maxinger said:
There are quite a few exchanges with low volume
and they still survive.


let's see how the FairX volume will be.
More...
Survival doesn't indicate any value to the ecosystem in and of itself. For example SSFs "survived" for years, but they had almost no volume and thus were worthless for traders. For one of these to be valuable they need to either have enough volume to be worth trading on or even better enough volume to be credible competition to the established exchanges. I'd love to see them pull off either one, just not clear how they're different from the last version of this which accomplished neither.
 
Sig said:
Curious how this is any different from the "Small Exchange"
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From a high level, it is great to see competition in retail futures. With both Small Exchange and FairX it is great to see no market data fees and lower exchange fees. FairX does seem to be different from the Small Exchange from our perspective.

Here are a couple of items we noticed.

One big difference is these contracts will trade 23 hours a day upon launch. From what we hear from our clients, this is a limiting factor with the Small Exchange as they only trade from 7 am to 4 pm CT. Trading around the clock will provide a better opportunity for risk management and better access for non-US clients.

FairX looks to have both micro and nano contracts. If you like the leverage of a traditional micro, this is available. The nano is 10x smaller than a micro with a notional value of approximately $2000, initial margins roughly $200, with day trade margins less than $50. These smaller sizes should help provide access to a broader range of traders and the ability to better scale in and out, like ETFs with all the advantages of futures.

The contracts also appear to be correlated with some of the more popular products traded now. It might be a more cost-effective way to gain access to broad index futures.
 
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Tradovate said:
From a high level, it is great to see competition in retail futures. With both Small Exchange and FairX it is great to see no market data fees and lower exchange fees. FairX does seem to be different from the Small Exchange from our perspective.

Here are a couple of items we noticed.

One big difference is these contracts will trade 23 hours a day upon launch. From what we hear from our clients, this is a limiting factor with the Small Exchange as they only trade from 7 am to 4 pm CT. Trading around the clock will provide a better opportunity for risk management and better access for non-US clients.

FairX looks to have both micro and nano contracts. If you like the leverage of a traditional micro, this is available. The nano is 10x smaller than a micro with a notional value of approximately $2000, initial margins roughly $200, with day trade margins less than $50. These smaller sizes should help provide access to a broader range of traders and the ability to better scale in and out, like ETFs with all the advantages of futures.

The contracts also appear to be correlated with some of the more popular products traded now. It might be a more cost-effective way to gain access to broad index futures.
More...
Thanks, that's helpful. The problem with the Small Exchange for me was the esoteric nature of their indexes. The Bloomberg version of the S&P 500 that FairX is using looks to be a lot closer to the actual S&P 500, so that's a good sign.
 
I am just curious. Is Payment for Order Flow allowed in Futures? If it is, these exchanges are more of playgrounds for MM's than for retail investors, very much the same as stock exchanges.
 
JSOP said:
I am just curious. Is Payment for Order Flow allowed in Futures? If it is, these exchanges are more of playgrounds for MM's than for retail investors, very much the same as stock exchanges.
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No, payment for order flow is not permitted in futures. All orders must go to a centralized order book.
 
I'm really looking forward to this. It is a total game changer.

I understand the need for clearing fees and commissions but for CME to charge $125/month data fees for "pro" traders is ridiculous. And that is just for ES/NQ. Add $125/month for YM. Add $125/month for CL. So that's $375/month even if you don't put on a single trade, just to even look at the contracts in real time.

And this is per account. If you have 3 brokerage accounts that will be $1125/month. Shows the power of monopolies.

I think these new products will be a huge hit and surprised it took this long.
 
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