After looking over some possible futures contracts to daytrade I have only come across a few with adequate liquidity/vol. Just curious about what determines how liquid a contract is. People tell me people trade the ones with liquidity ... but that's a catch 22 situation ... if no one trades them then the volume will never increase and hence no one is ever interested in them .... So how do these contracts reach 'critical mass' when everyone joins up increasing the volume? does it have anything to do with people using them first as arbritrage? and as more and more discover this the vol automatically increases and thus attracting more directional type traders?? i'm looking at the cbot minidow ($2) .. still not that much volume there.. yet ES and NQ are at record levels ....
An open interest of 5,000 contracts is the minimum that many funds use as liquidity criteria. The mini Dow is still new and IMO "too small" in contract size($200.00) every 100 DIA pts, to recieve much fanfare.
A lot of new contracts are structured to provide arb oppurtunities, however, sometimes they catch on and sometimes they don't.