new ES competitor

Discussion in 'Index Futures' started by trade4succes, Feb 26, 2004.

  1. Ditch

    Ditch

    Of course not, neither will lower commissions or a host of mickey mouse-products, that never get past 50k/day.
     
    #11     Feb 26, 2004
  2. The point would jave been obvious if you'd read the whole message, including the quote of the post that was being responded to.

    People are always posting about wanting smaller tick sizes - usually because they have the mistaken belief that it will make trading easier or more profitable for them.

    Stocks now trade in pennies - but that didn't make most equity traders any more money and it didn't turn losing traders into winners. In some respects, it might even have made equity trading a little more cumbersome.

    Same with reducing the ES tick size. When the "reduce the tick size" crowd find out they can't make money at a ten cent tick, they'll insist that the contracts need to trade in nickels or pennies.

    I'm with nononsense - the tick size is fine but they could maybe increase the size of the contract.
     
    #12     Feb 26, 2004
  3. .... I have to believe that somehow, somewhere, someone in the universe is nicking me by the tick size bid-ask spread everytime I put on a trade.

    I get filled on sales at the offer and buys at the bid far less than 50%, so someone is sneaking off with food from my table.

    So smaller tick size would be very welcome thank you very much.
     
    #13     Feb 26, 2004
  4. Ditch

    Ditch

    It's undeniable that decreasing daily ranges in relation to tick size is unfavorable. In your book everybody, who wants to see something improved, obviously has to be a loser. I guess you also don't see the need for adapting margins to volatility.
     
    #14     Feb 26, 2004
  5. Diode

    Diode

    Well, I'm certainly trying to nick you - that's what puts food on my table.
     
    #15     Feb 26, 2004
  6. Cutten

    Cutten

    The tick is a component of transactions costs, just as much as commissions and slippage. Transactions costs have an impact.
     
    #16     Feb 26, 2004
  7. What's cost to one, is profit to another.
     
    #17     Feb 26, 2004
  8. A smaller tick size is definitely a wealth transfer from the market maker to the speculator. Anyone who doesn't believe this needs to go have a drink with the dozens of traders fired from the equity floors of Wall Street.

    Of course, not all speculators will benefit equitably from said wealth transfer, so it is not clear if any one particular trader will become profitable from such a change :D

    That's only possible Diode, if you are a market maker :)
     
    #18     Feb 26, 2004
  9. Diode

    Diode

    I'm not a market maker, at least in the sense of someone who is always ready to make both sides of a market. However, the trading strategy I employ does attempt to capture the bid-ask spread as often as possible, and my analysis indicates that most of its profits come from doing so.
     
    #19     Feb 27, 2004
  10. #20     Feb 27, 2004