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cb,
Must agree with the thrust of your assesment but am a believer that 1/3
size contracts across the board may be better - even in the dreaded and
delightful KC and NG.
David Hunt
http://www.adest.com.au
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| From: cb <cpbow@xxxxxxxxxxxxx>
| To: omega list <omega-list@xxxxxxxxxx>
| Subject: Midam
| Date: Monday, November 30, 1998 1:35 AM
|
| Just for grins I submitted the following comment to the Midam website.
|
| "Because I am a small trader, I have been a fairly regular user of the
| Midam exchange, probably about 100 or so per year over the last 3
| years. (Altho I have had periods of success, I've not been successful
| overall, but that is because my strategies are not fully developed,
| certainly not because of fills or anything like that. In fact I
| occassionally relate to others how satisfactory my fills have been. I
| have used all contracts except interest rates, plat., AD.
|
| I have a couple suggestions. Grains: The 1/5 size contracts have small
| profit pot'l unless the markets are volatile, particularly for oats and
| corn. Why not consider 1/2 size contracts? Since corn has pretty good
| usage, but oats does not, why not first try a 1/2 size oat contract to
| replace the 1/5?
|
| interest rates: The 1/2 size bond contract is still too big for me.
| But I suppose since you already have a 1/2 size 10yr note contract
| (which is less volatile than 30yr bonds) it might be redundent to offer
| an additional 1/5 size bond contract. But if you had one I would
| consider it for position trades. (At least in the stock indices several
| exchanges offer different size contracts on the same exchange.)
|
| stocks: Even the emini is kindof big for a small position trader. How
| about an sptiny at 1/5 the size of the emini. This would be of use just
| for position traders. Not sure how much interest there would be for
| this, though, since so many people want to daytrade rather than pos.
| trade the stock indices.
|
| currencies: how about a 1/5 size JY contract in addition to the 1/2
| size? I'm not sure the 1/2 size contracts on overseas curr. have much
| advantage over the fullsize, since Midams don't trade overnight. (The
| added risk of not being able to get out overnight counteracts the
| smaller risk due to size.) The SF and DM already give a range of risk
| to select from (since the DM is somewhat less volatile than the SF). So
| the JY (and/or AD) would be good ones to start with for a 1/5 size
| contract. Or, could the CME's group of market makers who already keep
| the Globex currencies in line, do the same for Midams overnight so one
| could run overnight stops? [As I understand it, EFP stops are not avail.
| for less than a full size contract's amount.]
|
| metals: The 3 existing Midam contracts seem a good size. Apparently
| you tried in the past a 1/2 size copper contract and it didn't get any
| interest? I suppose that's because copper is not a real big contract.
|
| softs: I think you would get a *lot* of interest for a reduced size
| coffee contract (perhaps a 10,000 lb contract = approx 1/4). The coffee
| contract is known for v. good trends, but is also v. big and a NY market
| which people tend not to like. Personally, I'd like to see a smaller
| cotton contract, too. At $500 per big point, but only $1000 margin I
| think a lot of beginning traders underestimate the "size" of this
| contract. Again, how about a 10,000 lb contract for cotton?
| I'm not sure that a smaller sugar, cocoa, or oj contract would get
| interest. Though a smaller size *should* interest a smaller trader, and
| a non-NY exchange might attract some.
|
| energies: I suspect some interest in a smaller energy contract would
| exist for some of the same reasons as coffee above. Maybe just crude
| and ng since ho and hu follow crude (tho there's a fair amt. of retail
| interest in the heating oil and unleaded markets). Or, you could try a
| 500 bbl (1/2 size contract) in crude, and a 10,000 gal (1/4 size) ctct
| in the products. NG, being very volatile, might benefit from a 1/5 size
| contract.
|
| I've written this from the perspective of a small speculator. I know
| there are many sm. specs who start out, and then leave very soon because
| they can't practice good $mgmt. due to the size of the "regular"
| contracts.
|
| There is a fair amt. of hesitation among both traders and brokers, in
| using the Midam due to lower volume. My experience says this isn't
| really an issue here. But you might try some PR to spread the word.
|
| Several others on a mailing list I am on, expressed interest in smaller
| soft and energy contracts."
|
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