Hi Matt, Just an on-line 'venue' for Morad Askar (Futures Trader71) to collect the signatures/support. I doubt he would just link the site to the CME as I am aware he has been having discussions with Nymex to promote a micro CL. I would think he would just 'print' the results of the petition and show Nymex at a meeting. PS: not sure I would agree the site is solely focused on the three categories of petitions you quote - attached is a screen grab of other petitions the site recommends to me based on me being in New Zealand, so I don't think this petition is too out of place - IMO.
Again, in order to attract liquidity in QM you're going to have to allow successful arbitrage from CL. No one is going to bid and offer liquidity if they can't successfully hedge. CME set QM tics at 0.025 and CL tics at 0.01 exactly for that very reason. I'll say it again - if you're marginally capitalized trade USO or CL Spreads instead of fighting for something that isn't going to happen; at least not in the format you have envisaged in your own mind. You're not going to see a Crude Futures contract worth $2.50 per tic with increments of 0.01 per barrel and with a bid/ask spread as good as or better than the CL contract. As it is; commercials use swaps and block trades because the BRN and CL futures contracts don't offer enough liquidity on the bid/ask. QM and Micros will have ZERO commercial liquidity - as I've stated before it will just be sporadic speculators looking to pick each other off. Which is not a market you want to be involved in.
I can quite literally see block trades for ICE Swaps of 5,000 contracts within 5 tics of the futures best bid/offer. Happens routinely - dozens and dozens of times per day. Some heavy days like EIA data releases much more. If Shell Houston wants to do 8,000 CL contracts they don't sweep the book for 40 cents. And they don't bid for 8,000 on the CME futures market. It gets brokered by Prebon Yamane or Amerex or ICAP and it clears as a Swap through ICE or Clearport. Point being: none of that liquidity will filter down to a micro contract. None.
Wait a minute Bone. You mean Shell Houston doesn't just put up a refreshing order directly through an ADM, RJO, AMP, or Etrade account? You mean they have real intent of taking or putting the physical, with real need to hedge or otherwise protect or guarantee physical pricing? You mean physical products are different than financial products that are financially settled 100% of the time?
I can't argue with what you say as you are in a far more knowledgeable position than me, I am just a humble retail trader from New Zealand. But what I don't understand/can't reconcile therefore are the following: 1/ how then did the micro equity contracts work so well and successfully. 2/ how do we explain why the micro Gold contact (which has the same tick size as the mini Gold) has seen increasing volume since the introduction of the micro equities when brokers like AMP reduced the Gold micro margin to 1/10th and significantly sharpened the pencil on commissions. At the same time the QM volumes have remained static. By my calcs micro Gold has gone from a daily average of circa 10k to 40k while QM has remained at circa 20k. 3/ your focus in your responses is sort from an institutional perspective, and I am probably too retail centric focused. But what about players in other markets a micro CL could attract? By this I mean all the CFD players (outside of the USA) who are being ripped off by market makers and bucket shops. I always thought micro futures contracts coupled with realistic commission costs would entice a number of CFD players to a regulated exchange. Indeed I have been surprised that the US/Eur micro FX futures contract has still languished even after the reduction in margins and commission costs - and I put this down to a lack of granularity ie it's tick size is not small enough nor the same as the emini. Just to build on the point about me being in NZ. One of the reasons I am interested in a micro CL is that CL is one of the instruments that often has good movement during the US night (presumably because of the huge oil trading out of London) and therefore makes it attractive to trade in the NZ timezone. The US/EU FX contract would be the same if it had better volume. There are thousands of CFD traders outside the US who would/could benefit from 'lower cost' and reasonably liquid micro futures contracts that have good movements in the US overnight. Why would the CME not want to pick up some of that business that the CFD shops are getting right now? I know I can trade the MHI on the HKFE or the MJNK on Osaka, but that is not business for the CME. Surely the CME would be interested in expanding the range of their business to pick up activity that is currently traded elsewhere during the US night.
US evening hours liquidity is mostly keying off of the Singapore energy market. The very early morning US market movement is keying off the Brent contract, which would be London.
The fact we "retail" traders have access to critically important worldwide commodities(products requiring physical put or take delivery, and simultaneously, access to high leverage solely for the purpose of monetary profit from speculation is a gift!! We are guests.
Maybe the CME will. For all I know, they are going to introduce a micro CL contract next week. You should understand something about micro contracts - let's talk about the Gold micro contract. Specifically, the slippage. The tic size is one-tenth the full contract size, but the bid/ask is almost always wider on the Micro, and the exchange fee on the Full is $1.50 and for the Micro is $0.60. If your account capitalization is such that you need to be flat at the end of the trading session, and your intent is to day trade or scalp the Micro - there is very much an execution slippage disadvantage to the Micro that you should not dismiss. It's substantial in fact. If you are scalping it is in fact a substantial negative.
The clients that I have that trade Gold are spread trading and they are making their money on the LME and not on CME/Comex. And if you're worried about the availability of Micro contracts don't ask what it takes to trade on the LME.
Ummm ever heard of trading multiple contracts? Or do you believe that is only something the "big boys" should do?