Wheat, Corn, Soybean market depth query.

Discussion in 'Commodity Futures' started by kkfx, Feb 12, 2014.

  1. kkfx

    kkfx

    I am new to trading agricultural futures and checking these the market depth. All the 3, corn, soybean and wheat have a 12.5$ tick value and they are quoted in 2 cents increments. However, I notice the ticks from 6 s to 00s are direct 4 cents increment without 8s.
    I am attaching the market depth of wheat here. Does anybody know why this is so?
    I checked CME contract specs but did not find anything.
     
  2. Brighton

    Brighton

    The grain contracts are 5000 bushels. The minimum tick is one-fourth of a cent (.0025) times 5000 bu = $12.50 per contract.

    In the image you posted 5886 is 588.75 cents per bu or $5.8875 per bushel.

    Some quote systems use '2, '4, '6, and 1'0 to denote a quarter of a cent, a half cent, three quarters of a cent and a full cent. The corresponding per contract values are $12.50, $25.00, $37.50 and $50.00.

    '2, '4 etc is an archaic shorthand that probably started with chalkboards and carried over into the digital age. Surprisingly, it hangs on, but you'll also see a number of quote systems and platforms that use decimals.

    FWIW, grain options trade in eighths of a cent. Minimum tick value is $6.25 per contract and the 'shorthand' is '1 to '7 and then 1'0 for a full cent.
     
  3. kkfx

    kkfx

    Oh...Thanks Brighton for quick reply and explanation..