Quote from hanzahar:
$5
but still $12.50 a tick
look.... a 1 cent move in CL would be $10 and a 1 cent move in QM would be $5 (half... see it is a mini)... the only problem is that the QM can't move in penny increments... it can only move up or down in 2.5 cent increments... now thats $12.50... if the CL could move 2.5 cents that would represent a $25 move (proving that its the larger contract yet again since $25 is exactly twice as much as $12.50)... only problem is that it can't... it can only move in 1 cent increments remember.... so while its possible for your P&L on 1 contract to go from $10 to $20 to $30 in the CL, in the QM its only possible for your P&L to go from $12.50 to $25 to $37.50. However, by the time both contracts move 1 FULL POINT your P&L in the CL will be exactly twice as much as your P&L in the QM.
The size of the tick is purely a function of whether the contract is traded in 1/10ths, 1/100ths, 1/1000ths, 1/8ths, 1/4's, 1/16ths, etc.... it has nothing to do with whether or not its considered a mini or full-sized contract.
The fact that its appears to be different in respect to the ES/SP is partly coincidence, partly because the SP is 5 TIMES as large as the ES vs. the CL being only 2 times the size of the QM... partly because the QM trades in 2.5 cent increments vs. quarters in the ES... and partly because the CL trades in hundredths vs. tenths for the full size S&P.... in other words you're trying to compare apples and oranges.... they're two completely different contracts structured completely differently... of course they're not going to both exhibit the exact same spurious and irrelevant behavior... why would they?
If you want to compare a mini vs. a full sized contract you really can't look at anything less than the monetary value of 1 FULL POINT to make the kind of comparison you're trying to make.
And BTW... if you're wondering why the exchanges do stuff like this... its because the mini's are typically not as liquid as their full-sized counterparts and this is how they deal with it (or at least one of the ways they deal with it).
