E-Mini vs. E-Micro Yen Futures

Trading and Investing Helping Traders
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What would be the difference between trading the E-Micro and E- Mini Yen Futures, besides the value of the ticks? . Thanks -
Ken

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Hello Ken @demo24590, Thank you for continuing to ask questions that help our Futures and Commodity trading community.

The E-Micro contracts on the CME are not very liquid. We are truly not sure what purpose they serve with such low liquidity. Our assumption that they were created to compete with OTC FX Cash smaller contracts. However, the E-Micro Yen did not build any interest with traders. Also, we assume that hedgers and institutions would use the larger Yen contract due to its much higher liquidity and the more substantial sums institutional traders would need.

Some have argued that these relatively smaller contracts could be used as “training wheels” for smaller traders, but this is not a contract you can get in and out of with ease due to its poor liquidity. Slippage on any futures contract that is not liquid could be very high, limit orders could be harder to get executed, and it may not move in tandem with the Yen cash or the big Futures contract.

Let us know if you have any other questions.
Thank you,
Matt Z
Optimus Futures

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Thanks very much Matt, I appreciate your insight. Ken

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I agree with @Mod-MattZ,
Although the E-micro contracts seemed appealing to maybe try some strategies on 10x smaller per contract margin/risk but as Matt is pointing out, the lack of liquidity makes trading them extremely hard, fills are not realistic and its hard to figure out if your strategy is worth pursuing on “regular” contract sizes and therefore it’s a tough call @demo24590.
I would suggest using very conservative margins (100%+ of exchange maintenance posted margins) while using the demo side by side to test your strategies on the identical account size with margins that you “imagine” could work and learn to adjust the emotions during draw downs which are always accompanying any trading strategy & style.
If you are lucky you will stay afloat while making the costly mistakes and miscalculations on demo.
Just a thought.
Regards,

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