POLL: Would you like to see ES's tick size proportionate to that of SP?

Discussion in 'Index Futures' started by Thunderdog, Feb 8, 2008.

POLL: Would you like to see ES's tick size proportionate to that of SP?

  1. Yes

    59 vote(s)
  2. No

    49 vote(s)
  1. As we all know, the the contract sizes of the mini indexes are one-fifth the size of their larger counterparts. However, the ES tick size is only half that of the large SP contract ($12.50 vs $25). On the other hand, NQ's tick size is exactly proportionate to that of the larger contract, in that its tick size is one-fifth the size of that of the large contract ($5 vs $25). The mini Russell falls somewhere in between at $10 vs $25, but is almost as disproportionate as ES. (As an aside, the mini Dow's tick size is proportionate to that of the large contract.)

    So the question is, would you like to see ES with a $5 tick size?

    Personally, I would like to see a $5 tick size so that there is no incongruity with the large contract. (Perhaps that is one of the reasons that I principally trade NQ.) Recently, I spoke with a CME representative, whose name I do not recall. He said that there are no plans to change ES's tick size, certainly not in 2008. For what it's worth, he said that if enough people wanted it, then the matter would be considered more seriously. Therefore, if you agree with me, then perhaps you might wish to similarly voice your sentiments to the CME.

    In any event, please vote in this poll to satisfy my curiosity. I know the topic has been raised before in other threads, but I don't believe a poll was ever conducted. Please feel free to add any comments you may have.

    Thanks for participating.
  2. Sorry. I wrote "tick since" whereas I should have written "tick size." Hey, it's Friday.

    EDIT: Thanks to the moderator for correcting my typo. Much obliged.
  3. why.

juicy .25; in'n'out at a profit without es budging
  4. Personally, I don't consider 0.25 as a "juicy" profit. However, when I choose to exit, I would like to do so as cheaply as possible. Further, reference has been made in the past about larger players being able to arbitrage between the large and mini contracts due to the discrepancy in tick size proportion. I can't comment on the validity of that statement, but it is food for thought. Why would I want someone else to potentially have an advantage over me? And unless you are engaging in such arbitrage (if indeed such an advantage exists), then why would you want it?
  5. I thought there was a good thread on ET that explained the numbers on this in detail. It's floating around here somewhere... I think...

    I can see the argument that the bigger players have an advantage, if in fact that is true.
  6. Indeed. In fact, I mentioned that in my first post. However, I don't think that a poll was ever conducted asking ET members if they would like to see the tick size changed. Further, if enough people would like to see such a change, then it is incumbent on them to make their wishes known to the powers that be at the CME. As I noted, the CME representative said he would address such issues if they were raised in number. Assuming that his response was genuine, consider this to be my grassroots initiative. :)
  7. Yes, tighter spreads are always better if you use Market and Stop orders to enter and exit. They may also be better if you use limit orders too.

    However anyone trading less than 20 lots at a time can probably trade the YM if they want the benefits of a tighter spread. ER2 is even better as it trades a $10 a tick but it doesnt correlate to ES aswell as YM does.

  8. I was just wondering how the numbers play out on this. I believe the other thread dove into that.

    I think the next step for the grassroots committee is to list the contact info for what CME personnel should receive our requests. The easier it is on the individual, the more likely they will take action.
  9. True. Interested parties can send an e-mail to info@cmegroup.com

    I was advised that, based on content, the message would be forwarded to the relevant party.
  10. doli


    I support proportionality, so make the big and little contracts line up. I am sure that there is arb between the small and large contracts, but only for big capital. If I am ever big capital, I'll change my mind.
    #10     Feb 8, 2008