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

    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

    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

    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