variable amount per point

[osho67]

Will any futures brokers offer variable amount per point. e.g FTSE is £10 per point. But will somebody offer say £1/pointor £2/point. This is like spreadbetting in UK. This will help newbies to select the index they like but risk only what they want per point.

Comments much appreciated. Thanks

 

[ATLien]

No.

 

[MTE]

Quote from osho67:

Will any futures brokers offer variable amount per point. e.g FTSE is £10 per point. But will somebody offer say £1/pointor £2/point. This is like spreadbetting in UK. This will help newbies to select the index they like but risk only what they want per point.

Comments much appreciated. Thanks

No! That's the point of futures, they are standardized contracts! Brokers have no control over this and never will!

 

[osho67]

Quote from MTE:

No! That's the point of futures, they are standardized contracts! Brokers have no control over this and never will!

Thanks MTE for your response. If exchanges themselves allow variable amounts per point then this can work. This will help exchanges get lot more volume. Brokers will not lose as commission is fixed. Investor will get tight spreads and risk to his liking. Has exchanges ever considered this alternative?

Thanks

 

[MTE]

Quote from osho67:

Thanks MTE for your response. If exchanges themselves allow variable amounts per point then this can work. This will help exchanges get lot more volume. Brokers will not lose as commission is fixed. Investor will get tight spreads and risk to his liking. Has exchanges ever considered this alternative?

Thanks

I'm not sure what you mean by exchanges allowing variable amounts per point. Once the exchange sets the contract specs they are fixed. A variable amount would be an absolute mess when it comes to clearing.

 

[MGJ]

Please feel free to write letters to the exchanges, requesting variable contract sizes. Send emails, make phone calls, transmit faxes too. Here in the US we have a communication method called a "Candy-Gram" which is a telegram that is affixed to a 2-lb box of chocolates; if they are available in the UK, feel free to send some of those too.

Certainly the exchanges will be only too eager to create new products once they are made aware of the huge pent-up demand. In your letters / faxes / email communiques, be sure to provide estimates of the amounts of new business these products will generate (i.e. PROFITS to the exchange), and be sure to express it as a percentage so that even a dunce can understand. For example: "This will result in 50% more contracts traded, and since the new smaller contracts will be, on average, 1/5th the size of the existing contracts, 10% more Pounds Sterling of notional value changing hands".

Best wishes for rapid success!

 

[osho67]

Quote from MTE:

I'm not sure what you mean by exchanges allowing variable amounts per point. Once the exchange sets the contract specs they are fixed. A variable amount would be an absolute mess when it comes to clearing.

Can you go to some ETF to achieve similar result. ? That ETF has to have very close co=relation to the related future. And margin requirement very nearly the same. Possible?

Thanks

 

[MTE]

Quote from osho67:

Can you go to some ETF to achieve similar result. ? That ETF has to have very close co=relation to the related future. And margin requirement very nearly the same. Possible?

Thanks

If an ETF exists then sure, you can go with it. However, I seriously doubt you would get the same margin requirement. ETF is a stock, basically, so it is margined as per stocks, while futures are margined differently, namely per SPAN.

 

[osho67]

Quote from MTE:

If an ETF exists then sure, you can go with it. However, I seriously doubt you would get the same margin requirement. ETF is a stock, basically, so it is margined as per stocks, while futures are margined differently, namely per SPAN.

Thanks MTE. I am not very knowledgable. What will be the ETF for say ES, NQ, Dax and Dow jones ?

In general how can I calculate how many shares to buy e.g. for one point of ES?

Much appreciated

 

[osho67]

Quote from MGJ:

Please feel free to write letters to the exchanges, requesting variable contract sizes. Send emails, make phone calls, transmit faxes too. Here in the US we have a communication method called a "Candy-Gram" which is a telegram that is affixed to a 2-lb box of chocolates; if they are available in the UK, feel free to send some of those too.

Certainly the exchanges will be only too eager to create new products once they are made aware of the huge pent-up demand. In your letters / faxes / email communiques, be sure to provide estimates of the amounts of new business these products will generate (i.e. PROFITS to the exchange), and be sure to express it as a percentage so that even a dunce can understand. For example: "This will result in 50% more contracts traded, and since the new smaller contracts will be, on average, 1/5th the size of the existing contracts, 10% more Pounds Sterling of notional value changing hands".

Thanks MGJ for your comments.

In UK 100-200 spreadbet firms are making lot of money. So it might be possible for Exchanges to justify and introduce this idea. When they started E-minis same argument might have been put. This is just a thought

Best wishes for rapid success!