This morning, I changed all of my equity index and currency futures contracts from September '08 to December '08. Higher Open Interest and volume levels were the criteria for change. I keep a Hull Moving Average of the sum of open interest and volume on my daily chart at all times. It gives me a reminder that it is time to change when the Hull Moving Average begins to drop significantly. This visual reminder helps me to stay on top of this important aspect of trading, and avoid costly surprises later when contracts expire.
Russell 2000 Futures to be Eliminated by CME Next Week
Open Interest for the Russell 2000 futures at the Chicago Mercantile Exchange has fallen from about 2,000,000 contracts to only 30,000 now. Volume is very low, and liquidity is too poor to trade. The Russell 2000 futures contract will be eliminated at the CME at the end of trading next Friday, Sept 19th. The CME will no longer offer the Russell 2000 index futures after that date. As of today, I am no longer tracking it. The Russell 2000 index futures will be picked up by the Intercontinental Exchange (ICE) after Sept. 19th.
It will be interesting to see what stock index futures traders will use instead. Personally, I like the S&P Smallcap 600 futures index, which is also offered by the CME. The chart has been virtually identical to that of the Russell 2000, but with about half the margin requirement. Traders could double the number of contracts they trade, if they wish. However, liquidity for the S&P Smallcap 600 has been poor thus far. CME is offering "no fee" trades for both the S&P Smallcap 600 and the S&P Midcap 400 futures until January 2009, as an incentive for traders to switch. Liquidity for the S&P Midcap 400 futures has remained good throughout the summer and early Fall. I like trading the S&P Midcap 400 futures; it has less noise than the S&P 500, with a lower margin requirement, and with good liquidity. However, it doesn't track the chart of the Russell 2000 as well as the S&P Smallcap 600.
Open Interest for the Russell 2000 futures at the Chicago Mercantile Exchange has fallen from about 2,000,000 contracts to only 30,000 now. Volume is very low, and liquidity is too poor to trade. The Russell 2000 futures contract will be eliminated at the CME at the end of trading next Friday, Sept 19th. The CME will no longer offer the Russell 2000 index futures after that date. As of today, I am no longer tracking it. The Russell 2000 index futures will be picked up by the Intercontinental Exchange (ICE) after Sept. 19th.
It will be interesting to see what stock index futures traders will use instead. Personally, I like the S&P Smallcap 600 futures index, which is also offered by the CME. The chart has been virtually identical to that of the Russell 2000, but with about half the margin requirement. Traders could double the number of contracts they trade, if they wish. However, liquidity for the S&P Smallcap 600 has been poor thus far. CME is offering "no fee" trades for both the S&P Smallcap 600 and the S&P Midcap 400 futures until January 2009, as an incentive for traders to switch. Liquidity for the S&P Midcap 400 futures has remained good throughout the summer and early Fall. I like trading the S&P Midcap 400 futures; it has less noise than the S&P 500, with a lower margin requirement, and with good liquidity. However, it doesn't track the chart of the Russell 2000 as well as the S&P Smallcap 600.
