US brokerages have started to let you trade micro Eminis. Those are pretty much the same as the European CFDs concerning spread, margin, etc. So are Americans allowed to trade CFDs from now on? And if not, what would be the moral justification, when a very similar product is legal? I guess the reason for the ban could be just locking out the competition.
is there a list, of products, like CFD`s, that eventualy - were banned ? ( in US and abroad, trough out last 100 years ) Thanks.
How is an e-micro equity like (or the same as) a CFD, but an e-mini equity not like (or the same as) a CFD, since minis and micros are identical in construction?
I don't know, but European CFD brokers are not supposed to have US clients. https://www.contracts-for-difference.com/USA-restrictions.html "contracts for difference are not currently permitted to by USA residents (and citizens?) due to restrictions by the Securities and Exchange Commission on over-the-counter financial instruments. "
CFD's are intangible like the payoff on a swap. Yes, I understand that MES are cash settled. Binaries didn't take off and there is no momentum behind touch options, so you're stuck with vanillas and micro ES. CFDs? Never. And yeah, we had micro options on single name and they died a slow death.
Aren't CFD's classified as betting? Since sports betting is legal now in the US, and most states are strongly considering allowing sports books within their borders, it seems silly that you cannot trade CFD's.
Well, a SEC excuse has just occurred to me. Assuming most CFD brokerages are really just bucket shops, and the order never really leaves the broker, the SEC can claim that they are protecting the citizens' interest by not letting them waste their money. That is actually a good moral argument. But if CFD brokers are bucket shops, what are the new US micro emini trading brokers??? Aren't they the same??
The Small Exchange is talking up a US legal CFD type instrument in the US. The exchange has filed, but the Peak6 created product(s) are still in the talking phase. I suspect they are going to sit on product discussions until they are closer to having CFTC approval of the exchange. CFD's are not prohibited solely because of the bucket shop issue - the ASX listed a CFD in Australia to compete with the bucket shops. CFD prohibition in the US has to do with the borrow/lend function and - to the best of my knowledge - no one has applied for the product yet. It will be curious to see how The Small Exchange structures their product to get around the issue. Peak6 has some of the best minds in the industry and all the talk in Chicago is a US legal CFD type family of products.
January 03, 2019 07:30 AM Tastytrade, Peak6 invest $10 million in new exchange Three Chicago trading industry entrepreneurs are betting on a new futures exchange upstart aimed at retail traders. LYNNE MAREK TWEET SHARE SHARE EMAIL PRINT From left, Matt Hulsizer, Jenny Just and Tom Sosnoff Tastytrade and Peak6 are investing $10 million in a new Chicago enterprise called the Small Exchange, which aspires to be a futures and foreign exchange trading platform for retail traders. Tastytrade co-founder Tom Sosnoff, a trader turned entrepreneur, is teaming with Peak6 co-founders Matt Hulsizer and Jenny Just to launch the Small Exchange, placing Donnie Roberts in its top post as president and CEO. In a Tastytrade video posting, Sosnoff called the venture a “new futures exchange” with standardized contracts and central clearing that he expects to launch in the fourth quarter, if it wins regulatory approvals. He didn't specify what types of contracts would be traded. He has been working on the Small Exchange for a couple of years. It will sell subscriptions for $100, which will turn into "seats" on the exchange if it receives regulatory approvals, he said. It will be separate from Tastytrade. “You don’t buy this as an investment, you buy it as something you can use,” Sosnoff said in the video. “We expect this for people that are traders.” Still, he said, there will be a limited number of subscriptions in this round, and he expects they’ll increase in value later. The platform will start with futures and add options later, said Sosnoff, a former trader who made his fortune in the options industry. He is a co-CEO of Tastytrade with Kristi Ross, and he is its largest shareholder. Sosnoff reaped big gains after he founded Chicago online options company Thinkorswim Group and sold it in 2009 to Omaha-based TD Ameritrade for $606 million. His follow-up Chicago firm, Tastytrade, launched in 2011 as an online media company targeting its trading talk show at everyday investors, and added its Tastyworks brokerage arm last year after breaking away from early investor and partner TD Ameritrade. The media and brokerage business last year landed a $20 million investment from Menlo Park, Calif.-based TCV, which previously invested $25 million. The largest investor behind Small Exchange's $10 million funding is Tastytrade, said Roberts, who was an early employee of Thinkorswim and went on to become president and chief operating officer of TD Ameritrade Futures and Forex. Currently, the Chicago startup has five employees, he said. He is not an investor but expects to be in the next round of funding, he said. Roberts said he's in talks with TD Ameritrade, R.J. O'Brien & Associates, Charles Schwab and other brokers about connecting their retail customers to the exchange once it has received approvals for operation. In 2017, Sosnoff also invested in the futures business by making an investment in Seed Futures. Similarly, Hulsizer and Just, who are veterans of the Chicago trading industry, have been making investments in startups for years, some related to the trading industry and others outside it.