How the mini move of index future is set ?

Discussion in 'Index Futures' started by flyingforget, Sep 22, 2008.

  1. I wonder !Thank you
  2. Your question is not clear... please ask again.

  3. ES mini moves by 0.25

    and point value is $50

    FIVE-lot ES mini is equivalent to one S&P

    Are asking why and how they arrived at these values?

  4. why the mini move is 0.25 not 0.1?

    thank you
  5. Was arbitrarily set by the exchange.
  6. raker


    I guess you are asking why the spread is 0.25 and not 0.1 like the large contract ?

    The mini tick size should now only be 0.1 instead of 0.25 . When the ES was first introduced it did not have the liquidity so was priced with a bigger spread , now the ES has enormous liquidity which has surpassed the large contract and so the spread should be reduced.
    When questioned a couple of market making firms said in response to the possibility of a tick reduction they all say "not if the members have anything to say about it !! "

    Basically the locals who trade the large contract and are members on the floor are arbing the spread difference , and they dont want to give up their edge or profit ..
  7. indexer


    This makes the ES choppier than it should be.

    A wider tick size than is justified by the market and choppier trading, all so that a small group of floor traders can make a living at the expense of everyone else.

  8. that is exactly what I mean.
  9. That doesn't sound like righteous justification... not here in America.

    Oh, wait. That's EXACTLY how things work here in America. :mad:
  10. raker


    here's an interesting paper on the subject , it maybe a few years old but it is still relevant and argues the point for a reduction in the tick size...
    #10     Sep 23, 2008