At-a-Glance
Key Takeaways with Craig
US Equity Index futures prices fell yesterday afternoon as the White House held a press conference announcing the global tariff policy and never really recovered today. US Treasury yields also fell sharply, with CME’s 10-Year Yield future down by about 15 basis points and nearing 4%. Somewhat unsurprisingly, implied volatility in most of CME’s major options markets spiked higher today.
Given the well-publicized nature of today’s market sell-off, we wanted to take the opportunity to alert In FOCUS readers to an exciting new product launch that CME announced.
Yesterday, CME announced that it would be launching an innovative, new futures product called Spot Quoted Futures on June 30th. These new products will retain the characteristics of futures that most traders value such as capital efficiencies, nearly around the clock trading and will not be subject to pattern day trading rules. However, there are some fundamental differences that will make these products even more attractive to new futures traders.
- They will be quoted at the spot price, rather than at the futures price. This will allow traders to trade the price they are accustomed to seeing on their screen or, even financial news networks.
- They will be longer dated contracts, eliminating the need to track monthly or quarterly expirations.
- They will generally be smaller than similar products currently offered at CME Group.
Underscoring the difference in notional size, the chart below depicts the multiplier of the new SQF product and associated size (based on micro prices in the market this morning) versus that of the existing Micro contracts. As you can see, with the exception of the Ether contract, the new SQFs will be substantially smaller than the Micros available today.
Today’s market action also provides a good example of the difference these sizes can make in impact to a trader’s P&L. Obviously, today was an extraordinarily volatile day in CME’s financial and commodity markets, but using today’s action as an example, the Micro E-mini Nasdaq-100 was down by about 1,080 points and the Micro S&P 500 was lower by 280. These moves represent a $2,160 and $1,400, respectively, impact to a traders P&L in dollar terms. However, if we use the price moves in the Micro contracts as a proxy to estimate the move that might have occurred in the SQF (there is no guarantee they would be the same), these would have resulted in an approximately $108 and $280 impact to a trader’s P&L. Again, we rarely see price moves as large as we saw today, but these outsized moves do underscore the additional flexibility, accessibility and customization that the SQFs will provide traders.
For more information on these coming products, please click here.
Todays Featured Videos
Traders Resources
The information in the market commentaries have been obtained from sources believed to be reliable, but we do not guarantee its accuracy and expressly disclaim all liability. Neither the information nor any opinions expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts. The information on this site compiled by CME Group is for general purposes only. All information and data herein is provided as-is. Additionally, all examples on this site are hypothetical situations, used for explanation purposes only, and should not be considered investment advice or the results of actual market experience. CME Group assumes no responsibility for any errors or omissions. CME Group, its affiliates and any third party information and content providers expressly disclaim all liability with respect to the information and data contained herein including without limitation, any liability with respect to the accuracy or completeness of any data. You use the data herein solely at your own risk. All data and information provided herein is not intended for trading purposes or for trading advice. All matters pertaining to rules and specifications herein are made subject to and superseded by official CME, CBOT, NYMEX and COMEX rules. Current rules should be consulted in all cases concerning contract specifications.
Neither futures trading nor swaps trading are suitable for all investors, and each involves the risk of loss. Due to the leveraged nature of futures trading and swaps trading, it is possible to lose more than the amount deposited in a position. Therefore, traders should not deposit more funds than they can afford to lose without negatively affecting their lifestyles. A trader cannot expect to profit on each trade, and should only devote a small amount of their available funds to each trade. All references to options refer to options on futures.
Past performance is not necessarily indicative of future performance.
CME Group, the Globe Logo, Chicago Mercantile Exchange, Globex and CME are trademarks of Chicago Mercantile Exchange Inc. CBOT is the trademark of the Board of Trade of the City of Chicago, Inc. NYMEX is the trademark of the New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. All other marks are the property of their respective owners. Each of Chicago Mercantile Exchange Inc. (ARBN 103 432 391), The Board of Trade of the City of Chicago Inc (ARBN 110 594 459), the New York Mercantile Exchange Inc (ARBN 113 929 436) and Commodity Exchange, Inc. (ARBN 622 016 193) is a registered foreign company in Australia and holds an Australian market licence.
This site does not constitute a prospectus, product disclosure statement or legal advice, nor is it a recommendation to buy, sell or retain any specific investment or to utilise or refrain from utilising any particular service. Readers should consult their legal advisors for legal advice in connection with the matters covered on this site.
