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Forex E-micro Futures

  • #1
  • First Post: Mar 13, 2009 3:23am Mar 13, 2009 3:23am
Having recently switched to trading the CME euro futures, rather than cash fx, I think this could be a very smart move by the CME .. IF they can build volume over the first year year or so :

http://www.cmegroup.com/trading/fx/f...-e-micros.html

Trading EC / 6E (euro futures symbol depending on platform) has three big advantages imho :

1. Regulated exchange with tight 1 pip spread during major sessions (+ a small commission).

2. Volume available, a very useful plus for trading.

3. Because each tick represents a trade, rather than a change in the bid as for cash fx, tick charts are meaningful and therefore very useful.

J.
  • #2
  • Mar 13, 2009 7:36am Mar 13, 2009 7:36am
Quoting jtrade
3. Because each tick represents a trade, rather than a change in the bid as for cash fx, tick charts are meaningful and therefore very useful.

J.
Are you sure about this one? With the other e-minis and future contracts, a tick of movement doesn't necessarily mean that's 1 contract traded. You can have a couple hundred contracts traded in a moment and no movement because there's enough liquidity to eat up the supply without going to the next price level, therefore 1 tick != 1 unit of volume.

But I agree. If they can attract traders to these contracts and increase liquidity, they might be more favorable due to the regulation and ability to accurately tell volume.
  • #3
  • Mar 13, 2009 10:45am Mar 13, 2009 10:45am
Quoting jtrade
3. Because each tick represents a trade...
One trade, regardless of size, which is still very useful information (and you can always have a T&S window open to see what size is going through), whereas a tick chart on cash fx is far less useful as you don't know if a trade has been made and the ticks are - presumably - aggregated from multiple banks (I'm assumng the trader is using an ECN).
  • #4
  • Mar 13, 2009 10:13pm Mar 13, 2009 10:13pm
we'll see about that i suppose....

i compared the emini's with the standard contract, the depth of the emini's was a lot worse compared to the standard contract during asia session, i wonder if the e-micro is going to be the same

personally i cant get used to the currency futures depth as they are mostly computers spreading
  • #5
  • Edited 11:28pm Mar 13, 2009 10:57pm | Edited 11:28pm
interesting !

edit:
a question ,
do you have to become a member of CME to use such products ?
To Live is the rarest thing in the world , Most people exist , that is all
  • #6
  • Mar 15, 2009 4:42am Mar 15, 2009 4:42am
maheswara - no, you don't have to be a member of the exchange; you just need a futures broker.

Whathell - it's true that most futures, not just fx, are light in the Asian session. As for "computers spreading" - assuming you mean trade entry algorithm's to split an order into multiple parts to disguise size - I hear this is used more and more by most of the more sophisticated, large traders (hedge funds etc).... but most retail traders have no idea this is happening. Probably happens in cash fx as well, but seeing the futures volume helps nonetheless, at least as far as I am concerned.

I'd agree that e-micro fx futures will only succeed if they can provide the liquidity to keep the spreads tight, at least duruig the London and NY sessions. Let's see...
  • #7
  • Mar 15, 2009 9:21pm Mar 15, 2009 9:21pm
Quoting jtrade
maheswara - no, you don't have to be a member of the exchange; you just need a futures broker.

Whathell - it's true that most futures, not just fx, are light in the Asian session. As for "computers spreading" - assuming you mean trade entry algorithm's to split an order into multiple parts to disguise size - I hear this is used more and more by most of the more sophisticated, large traders (hedge funds etc).... but most retail traders have no idea this is happening. Probably happens in cash fx as well, but seeing the futures volume helps nonetheless,...

the idea of the mini is probably to take some percentage of traders from the spot market , many small time retail traders would shift if the cost doesn't differ too much , I know I would
To Live is the rarest thing in the world , Most people exist , that is all
  • #8
  • Mar 15, 2009 11:54pm Mar 15, 2009 11:54pm
by spreading i mean selling one pair and buying another etc... or selling in the spot and buying in the futures... what ends up happening is the depth shifting up and down a few ticks with nothing getting traded because all those orders are linked to movements in other markets

as for liquidity, it has been heaps low recently since the lehman bs... the futures depth is a lot different to a year ago... for position trading it probably doesn't make much of a difference though
  • #9
  • Mar 15, 2009 11:56pm Mar 15, 2009 11:56pm
splitting orders into multiple lots are called icebergs, you can spot them if you watch the depth long enough
  • #10
  • Mar 16, 2009 7:50pm Mar 16, 2009 7:50pm
Unfortunately its seems its gonna be 2.40 r/t which is more expensive even than MB trading LOL
  • #11
  • Edited 6:06pm Mar 26, 2009 5:39pm | Edited 6:06pm
HI, i have been following this release closely.....after discussions with CME i was able to get the following information:

Their are numerous market makers coming online and they will bring the spread to the same tightness as their large contract EUR/USD 1 pip.

Also if you shop around you can get commissions for 1.14 r/t....remember this contract is 12,500 not 10,000 lot.

Lets hope this offering from CME is a huge success...looking forward to trading on an exchange and with real order entry systems.......

P.S the exchange fees are only 32c r/t for this contract ......demand even smaller commissions from your broker !
  • #12
  • Apr 12, 2009 8:45am Apr 12, 2009 8:45am
Quoting jtrade
Having recently switched to trading the CME euro futures, rather than cash fx, I think this could be a very smart move by the CME .. IF they can build volume over the first year year or so :

http://www.cmegroup.com/trading/fx/f...-e-micros.html

e bid as for cash fx, tick charts are meaningful and therefore very useful.

J.
I totally agree with you, this has a big potential. So far it is unusable, my futures broker neither had a clue about it (it seems I was the first to ask about them) but, more important, I had a look to the realtime cme charts and they display not enough trading activity.

Nevertheless, I recall when YM charts were similar in shape, so it is probably just a matter of time.

BTW, have a great Easter time! ;-))))
  • #13
  • Jun 19, 2009 3:40pm Jun 19, 2009 3:40pm
Quoting Whathell
by spreading i mean selling one pair and buying another etc... or selling in the spot and buying in the futures... what ends up happening is the depth shifting up and down a few ticks with nothing getting traded because all those orders are linked to movements in other markets

as for liquidity, it has been heaps low recently since the lehman bs... the futures depth is a lot different to a year ago... for position trading it probably doesn't make much of a difference though

I found a broker providing currency futures montage data for next to nothing, I will start using it next week around NY open and see if it helps at all in trading spot eur/usd.
  • #14
  • Jun 20, 2009 2:53pm Jun 20, 2009 2:53pm
Actually how really does the E-micro works?

Is it an individual contract on it's own? Or it is a fraction oh the standard contract? Which means the price of a E-micro contract actually follows the standard contract?

If it is so, why do we need to worry about volume?

Please enlighten me...
  • #15
  • Jun 23, 2009 1:52pm Jun 23, 2009 1:52pm
has anyone tried trading the e-micro forex futures yet?
  • #16
  • Jun 24, 2009 7:54pm Jun 24, 2009 7:54pm
Except for the EUR/USD pair, it looks like the current volume might make it difficult to trade anything other than longer term (daily/weekly time frames). On another note, there doesn't seem to be any rollover swap fees (plus or minus) which makes position trading a little more straightforward...
  • #17
  • Apr 9, 2010 3:08am Apr 9, 2010 3:08am
Quoting Triton18
I totally agree with you, this has a big potential. So far it is unusable, my futures broker neither had a clue about it (it seems I was the first to ask about them) but, more important, I had a look to the realtime cme charts and they display not enough trading activity.

Nevertheless, I recall when YM charts were similar in shape, so it is probably just a matter of time.

BTW, have a great Easter time! ;-))))
With regards trading activity, as the e-micro fx futures follow very closely the main fx futures you can use standard futures data alongside the micro. There is a video on the CME website to this fact. The more small contract retail traders that start using the emicro futures the better for everyone. This would give the bucket shops a good kick up the arse with regards to levelling the playing field.
  • #18
  • Apr 9, 2010 3:38am Apr 9, 2010 3:38am
If the CFTC comes through on the margin reduction play then maybe the peanut gallery at the CME will get more action. Otherwise not likely.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #19
  • Apr 9, 2010 4:15am Apr 9, 2010 4:15am
Quoting The Fool
If the CFTC comes through on the margin reduction play then maybe the peanut gallery at the CME will get more action. Otherwise not likely.
ah yes, I forgot about that! Looks like a no hoper then.
  • #20
  • Jan 24, 2011 9:13am Jan 24, 2011 9:13am
Any updates on this one? I have found about those micro futures 5mins ago... shame on me

Anybody can share some experience with trading these? And how about margin requirements?
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