POLL: Index futures traders, would you prefer a larger or smaller tick size?

Discussion in 'Index Futures' started by Gabfly1, Feb 23, 2010.

Index futures traders, would you prefer a larger or smaller tick size?

  1. Larger

    8 vote(s)
  2. Smaller

    34 vote(s)
  1. Regardless of the index futures instrument you may trade, as a matter of principle, would you prefer a larger or smaller tick size?
  2. FredBloggs

    FredBloggs Guest

    good question.

    reducing tick size is supposed to increase liquidity with more prices introducing more institutional competition - according to the exchanges. most scalpers however (who provide the liquidity) prefer larger tick sizes for more profit.

    a larger tick size would also introduce more arb opportunities (against cash or options), countering the increase in vol that such a change would also introduce.

    i voted larger.

    my $0.02
  3. robots all like the tick size to decrease. t-bonds lower the tick robots showed up got rid of the locals , vol increased robot went away , exchange increased the tick to attract locals back , they did not come back volume is down. robot dont like big ticks.
  4. FredBloggs

    FredBloggs Guest

    same thing with euribor on liffe
  5. ES has the largest tick size of all the minis. When was the last time you were able to buy the bid or sell the offer? Perhaps I'm somewhat myopic, but I see a larger tick size as increasing the cost of doing business. More often than not, you'll pay more to get in and get less to exit.

    I voted smaller.

    My own $0.02.
  6. Without a doubt.

    Perhaps, you can find someone who traded equities prior to decimalization willing to explain it to you (in terms with which you feel comfortable).

    You might try sending a PM to Don Bright.

    - Spydertrader
  7. Lower tick size always better, unless you a market maker.

    ES should be 0.1 now that pit S&P is dead.

    Was only ever 0.25 because of pit didnt want competition and was easier to arb between pit and mini, if mini had wider spread.

    NQ was cut in half a few years ago, used to trade with 0.5 tick now 0.25, never done it no harm.

    QM was replaced by CL, which had much tighter spread.

    Treasury futures should all be decimalised:

    T-Notes trade in 1/64th, should trade in 1/100.
    T-Bonds should probably trade in 1/50 (currently 1/32)
    And ZF in 1/200 (currently 1/128)

    EuroStoxx 50 futures also need tick size cut in half.

    TF,YM,NQ,DAX,FTSE futures are all cool.
    GC and CL are tight too.
  8. I agree.
  9. I cannot comment on equity trading because I have not engaged in it. However, I have traded a number of index futures over the years. I don't think ES is doing most people any favors with its larger tick size. Just my opinion. I ask again, how often are you able to buy ES at the bid and sell it at the offer? A larger spread increases the cost of doing business for most mortals.

    I switched from ES to NQ before NQ's tick size was decreased. The decrease only made me appreciate NQ more.
  10. TF (russell 2K), CL and GC should be how ES should trade.

    0.1 tick and each tick worth $10. ie Each ES contract should be worth double what it is.

    CME has a good money making scam going with these tiny mini contracts (NQ,YM and ES).
    #10     Feb 23, 2010