Minimum Tick Size Increase for 30-Year T-Bond Futures On Sunday, August 30, 2009 (trade date Monday, August 31, 2009) the minimum tick size for 30-Year U.S. Treasury Bond futures will increase from ½ of 1/32nd of a point to 1/32nd ($31.25). The change will be applied to all expiration months. The minimum trading increments for futures intermonth and intercommodity spreads, as well as options, will be unchanged. This tick increase does not impact any other Treasury futures contracts. As a result of the tick size change, CME Group will modify the T-bond futures settlement procedure for Friday, August 28, 2009. In order to ensure that Friday settlement prices are in increments of a full 1/32nd , CME Group will calculate outright contract settlement prices by applying current settlement procedures and rounding them to the nearest 1/32nd price increment. Additionally, customers are asked to cancel all 30-Year T-Bond outright futures Good Till Cancel (GTC) and Good Till Date (GTD) orders by 4:03 p.m. CT on Friday, August 28, 2009. After 4:05 p.m. CT on Friday, August 28, 2009 all remaining 30-Year T-Bond outright futures GTC and GTD orders will be cancelled by the CME Globex Control Center (GCC). 30-Year T-Bond outright futures GTC and GTD orders may be re-entered during the Pre-Open period (4:15 p.m. - 5:30 p.m. CT) on Sunday, August 30, 2009. If you have any questions, please contact: Jonathan Kronstein (312-930-3472)
Thanks for the reminder Surdo. Any thoughts on how (if) this is going to affect trading intraday? Best trading, Jorge
Wonderful news. ES will always be #1 to trade but i have always been a fan of the US and was very disapointed to see the $31.25 tick value cut in half. BUMMER it was. Ranges in ES have temporary narrowed so this is especially welcome news. Think about it: ES tick value is 12.50 compared to US value now 31.25. Daytrading the US can be fun, a lot of fun if you are up on your game. Say you are a brand new trader and trading 2 accounts. 1 acct for trading 1 car of ES requires 20 handles or 80 ticks to win or lose a grand. Acct #2 you trade the bonds and you need 32 ticks to get a grand or lose a grand. Sounds like a plan.
Maybe I'm ignorant, but I fail to see how this is a good thing. The tick size is increasing, which is increasing your slippage. The bonds aren't all of a sudden going to start trading in a value range that is twice as big just because they increased the tick size. In other words, let's say that on a given day the range prior to this change would have been a full point (or 64 x 1/64th). It will still move exactly that full point, because that's the value range that people are willing pay for that day, only now you'll just have 32 ticks of movement to work with, instead of 64 ticks when it was trading in half 32nds. How is this in any way a good thing? You will save 50% in commission costs when trading the same size, but that's not going to make up for the losses you will incur in slippage by a long shot. Wider spreads make it harder to daytrade, not easier.
If an instrument moves $1000 dollars a day per contract then i rather see that $1000 move in 64 ticks rather than in 32 ticks. If 100 ticks = $1000 then that is even better. More tick movements = more opportunities to make/lose money. Almost all intraday traders i know prefer markets with a very high daily range in terms of $ and ticks.
I agree - I thought this was self-evident. I can't see why any traders would be cheering this move. For that matter, I can't see why the CME would be dumb enough to do it, either. They are going to lose out on 1/2 of their fees because people will now trade 50% of the contracts they were previously doing to match the same size. Who exactly benefits from this? Someone must be, otherwise they wouldn't be doing it.