POLL: Index futures traders, would you prefer a larger or smaller tick size?

Index futures traders, would you prefer a larger or smaller tick size?

  • Larger

    Votes: 8 19.0%

  • Smaller

    Votes: 34 81.0%
  • Total voters
    42
Quote from FredBloggs:

most of the scalpers i know (im not an authority btw) tend to lift liquidity, and replace it by getting in the queue on the other side - usually leaning on something. thats part of the art of scalping - reading the book to place your self in the best chance of getting fills.

i dont scalp for ticks, and im sure there are other ways....
More...
Interesting. The way I trade, I don't know for certain when I will want to enter or exit until almost the moment I need to enter or exit, depending on the immediately preceding price action. Therefore, I'm alway at the back of the queue when I least want to be there. Although my entries and exits are quite specific and fairly mechanical, I can't plan ahead of the price action because I can't predict it and have stopped trying.

Since you also don't scalp the bid/ask, why would you want a larger tick size, which generally only adds to transaction costs? Specifically, how does a larger tick size benefit you?
 
I want a larger contract size and a smaller tick size.

The S&P should go to the original $500 multiplier and use .01 increments for a $5 tick. Of course the spread will be 5 to 10 ticks wide, but what the heck, you can always hope that traders will keep putting orders in the middle of the spread.
 
Quote from Gabfly1:


Since you also don't scalp the bid/ask, why would you want a larger tick size, which generally only adds to transaction costs? Specifically, how does a larger tick size benefit you?
More...

i just think vol will get crushed with smaller tick sizes. its happened where ever they've done it before. not only that, if you have to wash a trade for a tick, then id rather have $25 per lot than $12.50.

it may sound alien, but i dont consider the spread as a cost of business. the price i get in/out at is simply that. im looking at levels or zones and time, not exact prices - even though im a day trader. i appreciate that i could probably add a whole load to my bottom line if i got a tick improvement each time, but as you seem to have found, id just be at the back of the queue on most occasions when i did decide to exit, and not get a fill. the market could back off - never to trade their again. then id be back at square 1 or worse.
 
Of course a smaller tick size in the ES would be better. The wide ES tick is like a butcher putting his thumb on the scale to rip-off the customer.

However you are running into CME people who arb between the pit and the electric who would lose free money and there are many people who just don't know any better.

I have been talking about this for years. The way a free market should work is people being able to split the bid-ask or just put a market order in if you need to get out quickly.


Quote from jeb9999:

I want a larger contract size and a smaller tick size.

The S&P should go to the original $500 multiplier and use .01 increments for a $5 tick. Of course the spread will be 5 to 10 ticks wide, but what the heck, you can always hope that traders will keep putting orders in the middle of the spread.
More...
 
Quote from FredBloggs:

i just think vol will get crushed with smaller tick sizes. its happened where ever they've done it before. not only that, if you have to wash a trade for a tick, then id rather have $25 per lot than $12.50.

it may sound alien, but i dont consider the spread as a cost of business. the price i get in/out at is simply that. im looking at levels or zones and time, not exact prices - even though im a day trader. i appreciate that i could probably add a whole load to my bottom line if i got a tick improvement each time, but as you seem to have found, id just be at the back of the queue on most occasions when i did decide to exit, and not get a fill. the market could back off - never to trade their again. then id be back at square 1 or worse.
More...
As I noted earlier, NQ was no worse for wear after its tick size was cut in half. Neither its volume nor its volatility suffered as a direct consequence of the tick cut. As for the spread not being a cost of doing business for someone who doesn't scalp the spread, I think you're wrong and I guess we'll just have to disagree on that one. Forgive me for saying so, but I think that someone who doesn't scalp the spread but who favors a larger spread is aiming at his own foot. As I see it, it is akin to an average person who opposes health care reform. (I refer not to politics but to a misguided disregard for self interest.)
 
The CME should just extend the SP's electronic trading through RTH. The only reason they don't is because the volume in ES would then dry up and the pit bandits would finally have competition and quickly go the way of the dinosaurs--where they should have gone long ago. The combination of the SP/ES tick differential and SP's pit-only day-session trading is what's keeping the pit profitable and masses from trading those larger contracts.

But perhaps the larger issue, and what keeps this situation going, is the CME's lack of rivalry in this area.
 
Well, it looks as though the poll results are largely in, having subsided to a trickle. At the time of this writing, about three quarters of respondents agree with me and favor a smaller tick size over a larger one. Thanks to everyone who participated in the poll and shared their comments. We may not necessarily have agreed in all cases, but the exchange was interesting. And a special tip of the hat to Spydertrader for his manly 'tude. Nice hat, Spyder. Where are the cattle? :)
 
You must log in or register to reply here.
Back
Top