How the mini move of index future is set ?

[flyingforget]

I wonder !Thank you

 

[gnome]

Your question is not clear... please ask again.

 

[Jahajee]

Quote from flyingforget:

I wonder !Thank you

ES mini moves by 0.25

and point value is $50

FIVE-lot ES mini is equivalent to one S&P


Are asking why and how they arrived at these values?

 

[flyingforget]

Quote from Jahajee:

ES mini moves by 0.25

and point value is $50

FIVE-lot ES mini is equivalent to one S&P


Are asking why and how they arrived at these values?

why the mini move is 0.25 not 0.1?

thank you

 

[gnome]

Was arbitrarily set by the exchange.

 

[raker]

Quote from flyingforget:

why the mini move is 0.25 not 0.1?

thank you

I guess you are asking why the spread is 0.25 and not 0.1 like the large contract ?

The mini tick size should now only be 0.1 instead of 0.25 . When the ES was first introduced it did not have the liquidity so was priced with a bigger spread , now the ES has enormous liquidity which has surpassed the large contract and so the spread should be reduced.
When questioned a couple of market making firms said in response to the possibility of a tick reduction they all say "not if the members have anything to say about it !! "

Basically the locals who trade the large contract and are members on the floor are arbing the spread difference , and they dont want to give up their edge or profit ..

 

[indexer]

This makes the ES choppier than it should be.

A wider tick size than is justified by the market and choppier trading, all so that a small group of floor traders can make a living at the expense of everyone else.

Quote from raker:

I guess you are asking why the spread is 0.25 and not 0.1 like the large contract ?

The mini tick size should now only be 0.1 instead of 0.25 . When the ES was first introduced it did not have the liquidity so was priced with a bigger spread , now the ES has enormous liquidity which has surpassed the large contract and so the spread should be reduced.
When questioned a couple of market making firms said in response to the possibility of a tick reduction they all say "not if the members have anything to say about it !! "

Basically the locals who trade the large contract and are members on the floor are arbing the spread difference , and they dont want to give up their edge or profit ..

 

[flyingforget]

Quote from raker:

I guess you are asking why the spread is 0.25 and not 0.1 like the large contract ?

The mini tick size should now only be 0.1 instead of 0.25 . When the ES was first introduced it did not have the liquidity so was priced with a bigger spread , now the ES has enormous liquidity which has surpassed the large contract and so the spread should be reduced.
When questioned a couple of market making firms said in response to the possibility of a tick reduction they all say "not if the members have anything to say about it !! "

Basically the locals who trade the large contract and are members on the floor are arbing the spread difference , and they dont want to give up their edge or profit ..

that is exactly what I mean.

 

[gnome]

Quote from indexer:

"... A wider tick size than is justified by the market and choppier trading, all so that a small group of floor traders can make a living at the expense of everyone else.

That doesn't sound like righteous justification... not here in America.

Oh, wait. That's EXACTLY how things work here in America.

 

[raker]

here's an interesting paper on the subject , it maybe a few years old but it is still relevant and argues the point for a reduction in the tick size...