ES TRADERS: Interested In Tick Size Change?

Discussion in 'Index Futures' started by julian0625, Apr 9, 2011.

Should the CME Change The S&P 500 EMINI Tick Size to Dimes Like the Pit Contract?

  1. Yes!

    27 vote(s)
  2. No.

    17 vote(s)
  1. I started trading the ES back in the early 2009 era, coming out of the decline of 08'. Back then, the S&P emini was still very volatile, and it was normally moving through ticks and levels very quickly.

    However, as volatility has declined, the ranges in the S&P emini have also contracted, making it hard to move through bids and offers because of the HUGE liquidity the emini has. This makes it harder for breakouts to happen, and allows for more frequent stop runs.

    Now, I LOVE trading the ES, but on days of low volume like last week, the ES just feels like it is wading slowly through a huge puddle of mud...

    The s&p pit traded contract trades in dimes (0.10, or 10 ticks a point). And therefore as much larger ranges in terms of ticks.

    So my suggestion is I guess, why don't we change the emini's tick size to 0.10 like the pit traded contract? We would see more volatility, and better price discovery!

    This would also allow for better spreading between the NQ and YM because of the similar tick sizes, bringing more volume into those contracts as well!

    The s&p emini has enough liquidity to transition to a different tick size, and I think it would bring benefit to the exchange, volume wise, as more speculators would play the market, as more volatility would be created.

    So all you ES traders! What do you think? Remember, the NQ tick size used to be halves, but because of CUSTOMER DEMAND, they changed it to quarters.

    If traders are for this, we could create a petition of sorts and potentially change the emini for the better!!!

    Post your thoughts and vote!
  2. Would love to see something happen to where the effective spread between bid and ask on the ES is the equivalent of the .01 bid-ask spread on the SPY.
  3. trade YM
  4. I do, I trade all 4 major index futures. HOWEVER:

    If I send an order of 30+ cars into the YM, I'll get slippage. Definitely wouldn't see that if the ES changed to dimes.

    Plus, if they do change the ES tick size, there will be more spreading between the YM and the ES, bringing for volume to both. Same with the NQ.

    The better price discovery in the ES, the better it is for ALL index futures.
  5. Handle123


    When I started day trading the big S&P500 in 1985, it traded in nickels at $25 a tic, daily range was 2-4 points. You needed $25,000 to day trade it and had to call broker who called the floor for your order. You simply learned how to trade and became a better all around trader.

    Just cause the trends are not like they were back a couple years, good traders learn to adapt. Or go to crude oil, that sucker moves big time and trades in pennies. The 6E runs well for big moves.

    You can always go to a smaller timeframe and trade more contracts.

    You are right, I would like a change of going back to what it was 25 years ago, didn't have so many whipsaws like now, market flowed better, today, too many underfunded traders get to play the game which causes stops to be run. Like shooting fish in a barrel, LOL.
  6. If it would be of benefit to those who conduct the most volume, the largest participants, it would of happened already.
  7. The large market participants only care about doing their business at a price with little or no slippage. The ES gives them this with its high liquidity. HOWEVER, if they changed the tick size, they would still be able to do this, in fact probably with better price discovery.

    Although I agree in some ways, I don't think it will affect the big boys that much. In fact, this tick size change would be geared more so to the speculators, and it should bring in more volume to every index future in theory.

    When the NQ changed tick size, it had no affect on the volume, in fact it helped it grow.
  8. Like Handle123 I started trading in the 80's. I also miss the smaller tick. I do a lot more analysis of limit order v. market order than I would otherwise.

    I remember when the eminis were a rumor. The way they got the market makers, i.e. liquidity providers, to buy in was to offer the larger spread. That's probably not needed anymore, but I don't see it going back. When you think about it, a tick of .25 at 1300 is about equivalent to a tick of .05 at 260, so it really is not that far out of line.
  9. Also!

    The s&p 500 emini is normally what drives the other indexes. If we could reduce the tick size, it would be easier for breakouts to occur, as levels would be reduced faster. This in turn would create an easier trending contract.
  10. Something is missing here...who cares about the range when you can trade 10 contracts and make $500 with just ES Point gained...the ability to scale up in the ES is key
    #10     Apr 10, 2011