Found this blog post about equating futures to ETFs. Sometimes, we all need to be reminded of the basics. http://tastytradenetwork.squarespace.com/tt/blog/equating-futures-to-etfs
Agree, these things are a complete rip off for the active trader Using round trip all in commissions from Amp trading: $1 gets you $27K notional in the micro ES futures $1 gets you $43K notional in the mini ES futures $1 gets you $120K notional in the normal DAX futures. This shows how much we are getting fleeced since the exchanges dont pass on reduced fees when they introduce reduce notional equivalent contracts. Eurex did the same, a few years ago they introduced a 1/5 notional mini DAX contract. But the fees for these were about half of the large DAX contract instead of one fifth. My guess Eurex would love to kill off the large DAX contract and replace it with the mini. But they havent had the balls to do so yet. CME were clever, they never made the large S&P contract full time electronic in the first place. E-Mini fees are bad enough. These micro jokes are even worse.
Anyone trading the ES micro mini ? Curious to see what RTH volume will be as AH is currently only running about 1% of ES
Not yet. I first want to see what (a) the daily trade volume is and (b) what the bid/ask spread generally is. I also want to compare the price development of MES with ES and the index, to see whether they all move in sync. Besides ES/MES am I also interested in the Russel 2000 products RTY/M2K.
There is already enough volume in the micro ES to accommodate a 20-lot and more (the equivalent of a 2-lot in the ES. Of course if you wanted to trade a size half-way between a 2 and 3 lot in the ES, you could trade a 25-lot in the micro). Yes, they will move in sync with the ES as both are based upon the SPX. The bid/ask spread will be the same .25 point. Knock yourself out, and good luck!!
Interesting you mention this. When the ES came along, the commission cost of "5 ES" was greater than the commission cost of "1 SP Big Contract" for the same notional value.... but the slippage and spread costs were consistently less in the ES, so it has become the preferred. (Last time I checked, the pit contract in the SP500 was still trading but at low volume... hard to imagine the ultility of keeping it alive, if it still is.)
This gig reminds me of penny slot machines. I just don't see the advantage of trading it other than it being a step up from sim for a new trader with 1/10 of the risk but also 90% less reward when you are right. Perhaps a ladder run before moving to ES if you have a strategy with a proven positive expectation. The probabilities are against you as well. Say you average 5 ES points a week net On ES you can scale that up to 100 cars with no liquidity issue and make seven figures. On micro would only net $25 per contract weekly with 25 lot liquidity limiting your earning potential without having having to break your order apart to work it to net $32,000 per year. If anything this signals just how desperate CME and FCM's are to attract new commissions
Yes. Everthing in the micro is exactly the same as the ES except at 1/10 of the value. (Commission differences, if any excepted). For some guy with limited capital the MES can be traded where the ES is too big for him. (My trading career began with $25/mo on a bank draft into Templeton Growth Fund, so I understand about "working with limited capital".... you start with what you have and try to work your way up.) I don't think there is any legit "knock" on the MES at all... unless the brokers hose their traders on commission....but if so, that won't last long. Competition will bring abusers into line. I don't think the CME is trying to "get more money out of existing players", but rather opening the market to new players who couldn't afford it before. Nothing wrong with that.
The challenge here will be newbies coming in with $5K, wildly over trading, and three weeks into it the plug gets pulled. If the round turn rates and fees are discounted proportionally to the contract size (relative to ES), and if the bid/ask is just as tight as ES - of course this is a good thing. But I have my doubts and reservations... And to be fair - it's not really in a broker's best interest to keep a client for weeks instead of many months or years. Will be quite a challenge for the Introducing Broker and the FCM's Risk Manager as well.