Why Doesn't CME Combine Micro, Mini, and Standard Contracts ?

I

IAS_LLC

Hello Everyone,

I'm just starting to explore the world of currency futures (and futures in general), and when I discovered that there are varying contract sizes (E-Micro, E-Mini, and Standard) I immediately asked my self why CME doesn't consolidate all of these contracts into the MIcro size(i.e for EUR/USD do away with the 125k and 62.5k contracts and only have 12.5k contracts)? I can't help but notice that the volume of the standard contract sizes is much higher than the micro sizes, and I think shrinking and standardizing the contract size would be beneficial for all players in terms of increased liquidity. People who like to buy the standard contract sizes could now just purchase 10 micros. CME would also benefit from increased commissions/fees due to a more liquid market inspiring more action (in theory).

Thoughts? Why am I wrong?

Thanks,
Brad
 
I would assume they would get deal based on their volume? Isn't that what the exchanges do for the big guys in the equity markets?
 
Micro and Mini contracts in any product category are designed for RETAIL speculation. There is/was an associated fungibility feature, but only for those products that trade in alternative or additional venues. For example index products trade in the pits and electronically. In the proper ratio, YM and DD are fungible with DJ, NQ is fungible with ND, ES is fungible with SP, etc. That could be useful when for example electronic trading is not available. When all products mini, micro, and standard trade only via a single venue such as Globex, fungiblity is merely a bookkeeping factor rather than an actual trading option, in line with the micro and mini retail speculation design.
 
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