Minis vs Full Size contracts

[donaldduke]

Elder says in his book:

"The only advantage of minis is the reduction of risk, but their commissions take a bigger
percentage from each trade. Beginners may use them for practice, but full-size contracts
are much better trading vehicles"

Now i think he means bid/ask spreads when he talks about commissions being
larger on the minis, for example the spread is 0.25 on ES vs 0.1 on SP.

So are all the traders here who trade ES & YM a bunch of beginners who haven't
graduated up to the big contracts that real traders trade with? :cheesy:

(I trade the Large EUR contract myself )

How exactly does one trade the full size S&Ps anyway?

 

[trademaker]

Mini contract futures

i take it this is very tounge in cheek - if you knew what u were upto u wouldnt be reading elders books and u would know the answres

if u looked at margin required for full size vs minis and compared that to tick size/point value you would realize elder - as usual of most vendors is talking absolute sh!t

not only this - but apart from dow & spoo, contract liquidity is rarely found in both the full size and mini contracts - it would be terrible for most newbies like u to trade a contract u cant get out of - so again elder is blowing hot air

also full size contracts tend to be traded in the pit so the commissin will be higher as the order goes through more hands.....obviously elder isnt aware of this either

if i were u id start doing some of your own research instead of reading silly books written by tw@tz

I agree, trading Mini's is a much better way of trading Futures, just do twice the number of contracts as Minis are half a full contract. Ok, commission charges might be a problem here as effectively you are doing twice as many contracts, but most brokers will negotiate a rate for you on this to make it financially viable.

Secondly, most full contract futures are not available on line and are traded in a pit, so a broker is more likely to give you a good rate on the mini and allow you to trade by yourself through their online platforms as it is more cost and time efficient for them also.

Make sure you get a good broker with a good online platform.

 

[weyhey]

I think that book was written before the lower commisions brought on by huge uptake in electronic trading.

 

[The General]

he's still a muppet in any case

 

[JTrader]

Hi trademaker

Don't know off the top of my head if this is true of all emini contracts v's full contracts - but emini sp500 (ES) is 1/5 the size of sp500 full contract (SP) - not half the size - $50 per point, rather than $250 per point.
emini nasdaq (NQ) is also 1/5 size of the full nasdaq contract (ND) - $20 v's $100 per point. Both of these eminis trade on the CME and the term "emini" is branded by the CME (Chicago Mercantile Exchange).

However, mini-sized Dow (YM) at $5 per point is half the size of the DJIA futures $10 per point and runs on CBOT (Chicago Board of Trade) - thus the term"mini-sized" and not emini.

Cheers

jtrader.

 

[JTrader]

Just looking at the emini v's full contract charts - emini nasdaq and emini sp500 prices look to move a lot smoother and with less gaps than their full contract counterparts - both on 15 minutes and daily charts.

jtrader.

 

[trademaker]

Hi trademaker

Don't know off the top of my head if this is true of all emini contracts v's full contracts - but emini sp500 (ES) is 1/5 the size of sp500 full contract (SP) - not half the size - $50 per point, rather than $250 per point.
emini nasdaq (NQ) is also 1/5 size of the full nasdaq contract (ND) - $20 v's $100 per point. However, mini-sized Dow (YM) at $5 per point is half the size of the DJIA futures $10 per point.

Cheers

jtrader.

Jtrader,

Yeah you are right, i was just providing a generic example of why mini's are more efficient and convenient than full contract futures. At the time I was placing a trade in light sweet crude oil so i guess i subconsciously just thought of that example.

The long and short (no pun intended), is that mini's are a good way to trade most futures for the online enthusiast and those who require a reasonable level of liquidity in order to go in and out of the market.

 

[Strategic Trader]

the pit traded big contract prices are just a guide due to the range of pricing in the pit

 

[weyhey]

Just looking at the emini v's full contract charts - emini nasdaq and emini sp500 prices look to move a lot smoother and with less gaps than their full contract counterparts - both on 15 minutes and daily charts.

jtrader.

I would have thought they would have moved at the same speed since they're based off the same underlying. If they dont then you would be able arb them off each other.
I guess it comes down to your account size to whether you trade full and mini.

 

[Strategic Trader]

sp big spead in 1/10's, emini in 1/4's - range arbing will keep them as close as possible - but not same

 

[MartinD]

in theory the full size contract IS cheaper in commissions - take the S&P for example... to trade equivalent size you would need 5x emini's for every 1 pit contract to equal $250 per point.

Not sure about "most" brokers but I pay $2.50 per side emini and $6.99 per side for pit contracts.

That makes $12.50 a side in comission for the emini equivalent of the (cheaper) pit at $6.99 per side.

Having said that, the speed of electronic execution, and the increasingly thin pit contract liquidity more than compensates for any increased commission costs. A colleague said he regularly gets 0.4-0.7+ slippage in the pit contract - thats as much as $175 per ct in slip vs the usual maximum slip of the 0.25 spread in ES which is just $62.50 for five eminis.

Worth trading the big contract for the cheaper comms? i think not. Electronic trading is the future.

 

[Strategic Trader]

you cant compare slippage in emini to big since they have different pricing at any given time and one may represent better value than the other - plus if you used a limit order - your phone broker will probably get you a fill if you are realistic, and also a good customer - you could well pick it up for half a point under the emini

but obviously for transperancy, ease of trading access and control - you cant beat an emini - but try putting in an order in 100s for eminis just as it takes off and size gets pulled, and see what you think of slippage then!

 

[donaldduke]

I think the big S&P contract will go electronic during market hours sooner or later. Its just a
matter of time.. Then the mini contract will just be for trading odd lots..

 

[JumpOff]

e-mini currencies?

I was looking at some charts at www.futuresource.com, and notice they list an
e-mini japanese yen, but I don't see any other e-mini currencies. What'supwiththat?
JO