Intro to Mini Hang Seng Index Futures

[Soultrader]

	Quote:	MidKnight
	Hi soultrader, I was just cruising through contract specs on the TSE website. Seems they introduced 3 new futures on June 16th 2008. The mini-topix as you pointed out, but also topix core 30 and a reit index. I can't find esignal symbology for any of these. Do you know how the volumes have been on these? Btw, the mini-topix has a tick size of 250¥ per tick, but a tick is 0.25 rather than 0.50 points like the full size topix. Thanks an advance. All my best, MK

Hi MK,

Volume is still pathetic. I have attached a daily chart and contract spec for both instruments.

[MidKnight]

That's a shame, how about the mini topix? I can't find any volume stats on tse site. The spec makes this seem like it would be a great product. Smaller tick increment and smaller contract. I can't see why it wouldn't be as well received as the mini nikkei was -- can you?

[Soultrader]

	Quote:	MidKnight
	That's a shame, how about the mini topix? I can't find any volume stats on tse site. The spec makes this seem like it would be a great product. Smaller tick increment and smaller contract. I can't see why it wouldn't be as well received as the mini nikkei was -- can you?

Well theres really not that many private traders in Japan. Also, it will take some time to pick up. My assumption is that the mini-TOPIX will become popular similar to the mini-Nikkei due to the tick size. It allows more retail traders to enter the market.

Dont know about the REITS though.... cant really see it taking off. Below is a chart for the mini-TOPIX. Volume is slightly higher but still low. Give it a few more months.. we should see more volume in this contract. Also alot of local brokerage firms are offering free commisions on the mini-TOPIX for promotion.

[BlowFish]

Hi James,

I seem to remember you saying you don't use MP with the MSI is that still the case? Did you ever try dividing the profile into am and pm sessions? I just wondered as I am currently 'learning MP' in my spare time and am intrested in potential shortcomings.

[MidKnight]

Hi blowfish,

I have tried this with using 15min bars instead of the 'traditional' 30min bars. It worked good sometimes, but with MP I found it to be too fine grained. I prefer to use MP as a broader tool focusing on the persistent forces of supply and demand.

On a totally separate topic regarding mini-topix that I was discussing with soultrader. I have contacted an IB rep and he said he will look into it when he is back in the office on Monday. He said: "If we can offer them we will."

My best regards,
MK

[smwinc]

The problem with any of the Mini Contracts is it is never going to appeal to any of the bigger traders.

I mean honestly, who REALLY wants that kind of tick size? It is appealing for the reasons Soultrader mentioned - new traders to learn on - but as far as being a trader and wanting to make a coin or two. Not really.

The "E-minis" in the US I believe are the only "mass traded" mini contract around the globe, probably because they were the first electronic version of their market which attracted the liquidity in the first place (i.e. versus the Big S&P in the pit.)

[Kiwi]

There is a good arbing business on the mhi so it doesn't matter as much as you might think.

Re the ES being the only one ... the SGXNK is a mini for the full N225 (about 1/3rd size) and is very well used by everyone from retail to banks and funds.

[MidKnight]

Yeah, I agree with you Kiwi. The mini nik in Osaka has seen steadily increasing volumes - especially during the recent volatility. Some days are doing near 1/2 mln contracts per day. To me, that is mass traded enough. Mini nik is 1/10th the full size.

[Soultrader]

	Quote:	smwinc
	The problem with any of the Mini Contracts is it is never going to appeal to any of the bigger traders. I mean honestly, who REALLY wants that kind of tick size? It is appealing for the reasons Soultrader mentioned - new traders to learn on - but as far as being a trader and wanting to make a coin or two. Not really. The "E-minis" in the US I believe are the only "mass traded" mini contract around the globe, probably because they were the first electronic version of their market which attracted the liquidity in the first place (i.e. versus the Big S&P in the pit.)

As Kiwi mentioned the Nikkei SGX traded in Singapore is popular amongst institutional traders. The tick size is 1/2 of the OSE Nikkei. There are a few reasons why.

1. The SGX begins 15 minutes early at the open and 15 minutes early for the afternoon session. This combined 30 minute timeframe is extremely key to balance out positions amongst traders who have portfolios.

2. Lining up in que on the big OSE contract can be an issue. As the SGX Nikkei's minimum increment is 5yen, this makes it easier to enter and exit compared to the OSE Nikkei at 10 yen.

3. Plenty of arbitrage occurs between SGX and OSE. About 20% of SGX volume I would say is arb. (though this could be more)

Reason #2 also applies to why the mini Nikkei is quite popular. Its simply easier to take profits at a better price compared to the OSE contract.

[mishnas]

	Quote:	Kiwi
	I strongly recommend IB for HSI/MHI trading. The charges are good; the margins are conservative; and they have a server right next to the HK exchange so you get minimum latency to the rest of the world.

Are there any other brokers beside IB for trading the HSI and Nikkei?