CME Group launches Micro E-mini Futures in May 2019 :
Interesting. It’s been a long time that they wanted to attack the retail space and compete with the CFDs. Matter of time ! In practice, it will probably lack of volume / popularity like previous experiences.
Micro e-mini futures started trading this week.
Yesterday, on their podcast, @juancolonbo mentioned they have now decided to offer futures due to the lower amounts required by micro e-mini futures https://www.ivoox.com/147-mataran-microfuturos-a-cfds-audios-mp3_rf_35604419_1.html
They’re also doing a survey to choose the futures platform: https://www.youtube.com/channel/UC6aYa9XjWy-HmHhyp5uN_9g/community?lb=Ugw8jitq29Xod_TwpEl4AaABCQ
For integration with the current enviroment and darwin creation i would suggest mt 5 like already offered by ampglobal.com.
Choose 1 ? Usually, you’re offered all of these at the same time… In practice for instance, the CQG datafeed permits it and is integrated by all the platforms listed here.
I’m reading more the survey as, do you want MT5 support ? (which requires a specific effort and may be the one platform which is not yet available at every futures broker). I must say I’m quite concerned by the feedback… It’s asking an army of forex traders if they want the only platform which was never designed for futures in mind principally. MT5 is lacking a lot of tools which respond to the specifics of the futures’ technical aspects. There is too much ground material to keep track against the other platforms which have been here for more than a decade satisfying futures traders.
I hope that Darwinex does not try to hybrid too much the crowds it will try to reach. Respect and put yourself in the shoes of every community. No problem to include MT5 but do not lose focus on the futures’ audience, which is very specific and has its habits, or it will be a miss.
Emicro futures’ success will depend on the level of adoption.
There are already Emicro currency futures and they did not get the level of attention of their big brother contracts : less liquidity, worse spread, higher commissions ratio against notional value …all of these adding up being detrimental to the trading results, making your day harder to extract a financial edge.
Emicros could blow the CFD-forex industry from their aspects …but we’re not there (far, even)… just like LMAX had the aspects to revolutionize the industry but it did not take it over. Because the target crowds did not concentrate at these right places. The adoption is still sparse. Alas, it’s only worth when all kind of participants massively flood a marketplace. Until then, there’s little point to be alone at the party, especially when the few competitors being sharks or pros and the retails dominantly absent.
Anyway, considering Emicros is nice …but it shouldn’t shadow the rest of the quality of the offer. I’m praying for Darwinex to work out on very low intraday margins, to make the bigger contracts (which are really the niche of futures) more accessible to the large number. Take exemple at the american future brokers : AMP trading, NinjaTrader, Velocity futures, Deep Discount Trading, Tradovate, etc (a lot more so than Degiro or InteractiveBrokers which are totally conservative regarding risk). Match the intraday margins of these brokers please… they’re on par with the leverage offered by the professional status of CFD-forex and that’s how it should be (it’s not a talk about leverage vs AuM, but a matter of making accessible instruments that are not otherwise)
If you can’t match the low intraday margins due to the gap with overnight margins because of the Darwins handling, please consider to offer special lower intraday margins for those who do not care about the Darwins aspect of trading… 1 margin plan for those who run Darwins, 1 margin plan for those who don’t care (with some money and some leverage, keeping 100% of the profits can be >= as interesting as managing AuMs under-leveraged and keeping 20%, this is a fact from calculus)
There are some very good futures brokers already (regarding agressive costs, access and tools) . Some I could easily qualify as dream like. So it will be hard to convince a transition towards Darwinex if the same standards are not met, or really close, due to the Darwin effect alone.
In other words, to make it clear, Darwinex should ask itself if it wants to convince FX-CFD traders to take a trial at futures or if they want to persuade already established futures traders ? To me, this is 2 very different goals, from where decisions should arise.
This is some early feedback of the E-micros’ start, mixing some excitement and disappointment (expected from past experiences)
(last screenshot, spread of 4 ticks when 1-2 is expected on the Emini)
It’s like trying to sell a Ferrari to everyday people, it does not work when they’re actually used to put stickers on their car.
Traders on Emicros will enter the futures’ space, sure, but at disadvantages from the beginning. They’ll need to be even more performant, at a UFO level of competency (to just stay profitable). Targeting them is not the solution imho (packing them into Darwins not either) because too high of a bet to revert a situation not in your favour, the product’s structure starts as defficient.
The solution is to satisfy the core futures’ traders, even if it means a fewer audience, and those trade on larger contracts because that’s where the money is, where the game shows the proper conditions. In the end, please become the nicest traditional futures’ broker, by providing the basics first, which really is about 2 parts : commissions and margins (since the rest of the environnement, pricefeed, spread and executions unlike FX, is shared similarly through the same central venues, it’s not something to distinguish yourself from anymore)
Have a good weekend
A study on the costs effect
NQ (Emicro Nasdaq) agressive commissions : $3.60 per roundturn ($2.96 could be found))
Usual spread : 2 ticks of 0.25 point (point value = $20)
Ratio of spread + commissions for 2 Market orders (entry+exit at level 1 liquidity) against notional value : 0.0089%
MNQ (Nasdaq) agressive commissions : $0.74 per roundturn
Case of spread : 4 ticks of 0.25 point (point value = $2)
Ratio of spread + commissions for 2 Market orders (entry+exit at level 1 liquidity) against notional value : 0.0179%
On the EUR/USD spot fx, you’re more at like 0.0060% so 3 times less… if you plan to be active on an Emicro indice, you better know your shit or the ruin will arrive sooner (counterproductive to provide investment vehicles)
Just like the cryptocurrencies are charged 0.53% (0.41% after talent rebates) including spread, despite the volatility much higher, you better take a few nailed down trades a week than click all day long (that translates into less revenues for the broker, unless leveraged through AuM)
My point is that there may be more Darwins derived from Emicros but those traders will also bring their share of inconsist results from structural reasons. Conclusion, please investors fighting the odds against them or please traders acting with better conditions ? That seems to be the equation solving about integrating futures the “right” way.
I for one feel it is a great idea to offer fututes, especially to use for making darwins. And as a mid term trader the advantage of no overnight fees largely trumps a slightly bigger spread. I am no specialist on trading plateforms but what i see as important is a good charting package, level 2 pricing and accumulation/distribution algos if possible. I have no preference for a brand.
Hi Alex, there are no blatant overnight fees, but it does not mean that staying overnight is free. The prices of futures are incorporating interest rate financing and dividend releases, which means that far from the expiry date, the price of the future instrument is buffed up against the underlying price, and that price adjustement will narrow until it gets closer to the expiry date. Unlike CFDs, the dividend adjustments are not compensated by the broker, which means you lose on the price evolution directly. Although you will not feel it, it happens behind the scene…
So it’s a misconception to believe that swinging overnight has no cost on futures, it makes you think so because how it’s packed, its internal functionning being less transparent.
That’s why I urge traders to teach themselves educational knowledge, and follow some official courses, like the Series 3 exam material from the NFA (you can buy books for $50 to $200). You’ll learn technicalities that you are unaware of.
About the platforms, there is too much to discuss. Just one exemple, since the futures market is open with a deep order book, you might want to teach yourself to use Buy at Ask or Sell at Bid (limit) orders, in order not to suffer slippage from Market orders, these come as buttons on NinjaTrader, SierraChart, etc, not MT5. You might wanna use more complex orders like Market If Touched to avoid partial fill, etc. Then, these platforms handle well the specifics of rollovers on continuous contracts, etc. …and many other detailed functions.
By default, MT5 is very limited and just cover stuff too much on the surface. I don’t think you can be trading futures seriously like you should without much addons, and again I doubt that everything is available at all or that’s the right path to be dependant on them. What I’m saying is that a guenine futures platform cover more needs than a forex oriented platform. Anyway, if traders want to complicate their life, that’s their problem. Cheers
Edit : some brokers like IB are making you pay an extra fee to be overnight on leverage… it is very cheap, but it exists
Thanks for your input.
I must confess i only trade cfd on futures not real futures until now, and though i know the theorie of interests being incorportaded in the futures prices, in practice when i trade the cash and futures cfd sometimes i see a difference in pips made sometimes not at all and the difference is minimal in relation to overnight fees on the cash cfds( 2 months duration for the trade). Maybe it’ s different with real futures but i imagine the broker follows the real futures very closely with it’ s cfds.
Thank you for starting the discussion about possible trading platforms for futures @EvidenceAlpha !
I think it is very important not to go with MT5 for that purpose. There are just so much more options and functionality with a platform like SierraCharts. Yes, it is not useable for free, but if you want to professionally use all the market depth information (volume profile & footprints, etc.), IMHO MT5 is not the way to go.
GLAD that someone agrees (finally). Great statement
Indeed went the following route over the years : CQG > NinjaTrader (many years) > SierraChart (worthy upgrade)
Appreciating MotiveWave too as a contender.
My favourite now is the proprietary one of a broker I won’t mention. It fulfills my needs.
Re MT5, I’m seeing it myself as a possible bridging (copying) solution between brokers when an API isn’t available… so I’d like to have it as a side order but certainly not as primary weapon.
Edit : SC is quite affordable. $26-$36 / mo (before longevity discount)
You can drop it anytime unlike a lifetime licence of NT (I have 1 multi-broker to sell or exchange) that you engaged with
List of platforms at my favourite fut broker
I’m not sure why Darwinex in the survey mentions NinjaTrader. Since they became a broker, they locked down the connectivity partnerships.
Only the old customers with a licence (like the one I’m getting rid of) from the past can still connect to a CQG enabled broker. However, that concerns only a handful of people nowadays… outside any new customers
Interesting to note that with intraday margins as low as $50 on the Emicro indices, the resulting leverage bypasses 250:1 (not different than the bigger contracts), which is much more than available by the professional status on the CFD counterparts
So, I looked myself at the Emicro contracts in a live environnement, instead of reading strangers’ comments. To tell the truth, I’m quite impressed. Surely they show slightly worse conditions than the bigger contracts, but it remains satisfactory. The spread is good to okay, the liquidity globally is here.
I also looked at the older Mini Dax and I’m surprised how thick and tight it became since it’s start !
Verdict : I totally see like it could be a CFD class killer, includng LMAX
The conditions seem better and should improve. It could be the success LMAX dreamed of, in an even fairer, neutral and technical environnement.
I’m now really enthusiastic that Darwinex is going to release this ! If only Darwinex can not forget to be really competitive on commissions and margins (of all contract sizes), then it will be totally dope !
Hi Community, if you are looking for an alternative to MT4 or MT5, you should take a look at the AddOn “Stereotrader”. Stereotrader is also available for trading futures with MT5. The developer Dirk Hilger from Cologne trades even futures with this tool. (https://www.ampfutures.com/metatrader/) More information at https://stereotrader.de/
The documentation is in English. I’ve been using Stereotrader MT4 since 2016 and MT5 since 2018. Take a demo and test the possibilities for you.
Screenshot from today; MESM19 (AMP Futures)
a small comparison of the platforms Ninja & MT5 stereotraders
StereoTrader offers a variety of comfortable features. Last screenshot:
Thanks @weissensee for this alternative !