Discussion in 'Ag Futures' started by runningman, Apr 6, 2009.
Is mini-corn worth trading? Is there any volume?
depends........its only 10 bucks per cent which can be both good and bad depending on how much capital you have in your account, your experience, etc. Although there isn't a lot of volume in the mini ags they are fungable with the standard contracts so the price is always competitive (arb opps otherwise) so if you leave a limit order in there and the standard corn contract trades there you are highly likely to get filled.
I am currently short 1 ZC July and long 5 YC July on my IB account so I don't think they are fungible...Am I missing something?
hmm, i have never traded a mini before but I am almost certain they are fungable as I know a few guys that have arbed the minis with the standard contracts at the CBOT.
I would call you broker to get it straightened out as im almost positive they are.
youngtrader is correct...they should be fungible, just as the regular electronic contract is fungible with the pit traded contract, or how the ES is fungible with the big board SP.
Yep, I was intrigued when I arbed it and saw the positions remaining on my TWS. I searched on CME website, didn't find anything and thought they weren't fungible in fact. I also noticed the "spread" don't require margin at least. I will ask IB.
1) Since corn is "deliverable" and not cash-settled, I believe you can not automatically offset one contract to the other before contract expiration. That means they're not "fungible".
2) I believe some of those pit-locals attempt to accumulate multiples of 5000 bushels of grain, (a 5-lot of mini-grain), at one delivery location and then cross-deliver that against a 1-lot of CBOT grain at the same location as a proper delivery. You can't do that if you have cash-grain at multiple locations in less than 5000 bushel increments.
3) You can spread CBOT versus Mini for reduced margin.
4) If you can't comfortably margin a 1-lot of the 5000-bushel contract, then you shouldn't trade corn at all.
Thanks Nazzdack for the explanation.
Positions offset at expiration.
IB don't hold long positions after first notice, so I will have to get out by myself.
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