I don't trade YM, but I always thought that it was jumpier than ES largely because it has significantly lower volume. Are you saying that larger tick sizes would result in "steadier" movement? If so, then why stop at a "mere" 0.25 points? Personally, I would prefer a tick size proportionate to the large contract. I see no ostensibly fair reason why it should not be so. I would also suggest that the existing discrepancy is not to my benefit.
guy, I quote from your page: "The reason, I believe, that day traders favor the ES is because of the smaller contract value (5 times smaller) than the SP. This allows small traders the ability to scale in and out of trades and implement trading strategies that would not otherwise be available to them if they were trading the SP contract." Well, the answer why "daytraders favor ES" is simply because it's an ELECTRONIC direct-access level-playing-field market (ignoring exorbitant fees CME commands for ES etc), whereas SP is PIT open outcry. I can't imagine anyone daytrading the SP off-the-floor, unless he does less than 2-3 trades per day and sends his resting orders in advance to his executing broker on SP floor. I have some systems that could be traded this way. So, effectively, the daytraders have NO CHOICE between ES and SP. And from what I hear, a lot of SP floor traders nowadays just arb the SP/ES most of them time (thanks to the wider spread).
You are right! We should lobby for ES to have a 1-pt spread!... I just think ES would be different with a 0.10 spread. Maybe not... I don't want to find out the hard way, that's for sure!... It sure would make the DOM a little stranger to deal with...?
Depth Of Market. Most trading platforms offer a DOM or DOME (DOM Execution) screen so that you can see the volume bid/ask at the five closest prices to the inside bid/ask. DOM just shows the volume while DOME allows you to execute trades from the DOM screen. (I might be slightly wrong about this but if I am someone is bound to jump in here and correct me.)
This is true. I should have said that the reason that smaller traders favor the ES is because... I'll correct this - thanks.
Thunderdog, You rightly question this. Don't get conviced by wisecracks. As I wrote already, I used to track both NQ and ND over a long period, both differing in ticksize. I ALWAYS FOUND THE ND THE MOST LUCRATIVE TO TRADE (excluding commission considerations). Why? Smaller tickvalue of the two. Arbing syphons profits from NQ to ND. That's obvious. I at least have an explanation to offer.
Its shocking to see traders supporting the spread. Its like gamblers supporting the house edge. :eek: