Can SSF (single Stocks Futures) Remove Some Liquidity From The E-minis?

Discussion in 'Financial Futures' started by Aranha, Jul 5, 2002.

  1. Aranha


    Dear All,

    Will the introduction of the SINGLE STOCKS FUTURES (SSF) take away some liquidity from the SP MINI and NASDAQ MINI?

    I mean, after the implementation of the DAYTRADING RULE last year (25K minimum), I may be wrong, but I have realized that the liquidity of the MINI has incresed, dont you?

    And now as soon as the SSF become available, can the liquidity of the E-MINIS decrease?

    What is your opinion?


    Raphael Aranha
    p.s: Please forgive me if I'm saying any stupid.
  2. i would not think so. the product types are var far too different.
    the increase of volume in E-Minis was not due to PDT rule,
    but due to major market participants moving out of pit ->
    electronic. for these guys, an index based future means
    something different than a SSF.
  3. It is hard to know what % of volume in the Minis now comes from PDT traders who have switched to the Minis. There is no denying that liquidity has increased steadily since contract inception, but you might make a case that there was an acceleration in 2001 (exactly when did the PDT rules kick in?). I found an interesting graph on a sponsor's site:

    I'm not trying to promote the site but the information they provide on that page is informative.
  4. To answer the question, at the rate that the SSF introduction is proceeding, it will continue to add liquidity to the EMINIs for many years to come. :eek:

    No seriously EMINI growth will probably continue in spite of SSFs, though possibly at a slower rate. Ultimately the Minis are still growth markets as long as traders can get a better deal there than in the pit, and as long as a large portion of pit volume hasn't yet made the transition to electronic.
  5. Mike777


    Personally I would have thought the opposite. Arbs, Hedging, Complex option/SSF strategies and so on.

    The more instruments that are invented the more people seem to think of ways to churn even more volume.:D