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Earl:
Security futures challenge our understandings of what liquidity is.
Most contracts are judged by number of contracts traded. However,
with security futures products like the QQQ ETF, and others, the
contracts market makers are continually making 2 sided markets. I
regularly see bids and offers 100 up on security futures at both
excchanges.
Bill Rainer, former CFTC Chairman and CEO of OneChicago, recently
said that there has yet to be an order that is too large for
OneChicago market makers to handle. They have had 2000 and 3000 lot
orders all trade at the same price. I agree, and the same is true
for NQLX too.
Security futures markets have the most liquid cash markets available
of any futures markets. These cash markets are accessible to all,
but the market makers have multiple avenues to lay off their trades
in broad based indices, cash stocks, options or other security
futures products.
Thus, while we might brand low volume for a contract poor because of
low number of trades, that label does not really reflect the true
liquidity of those markets.
Regards,
John J. Lothian
Disclosure: Futures trading involves significant risk. Security
futures are not for everyone.
--- In realtraders@xxxxxxxxxxxxxxx, "EarlA" <earl.a@xxxx> wrote:
> I see, Alex, thank you. I've not had much interest in the Single
Stock
> futures and was unaware of the QQQ futures contract. I would think
that the
> contract would have heavy headwinds going against the NQ, but at
1/8 the
> size of the NQ, it might appeal to those seeking a very small
contract. I
> would think however that, as you indicated, the liquidity would be
very
> poor.
>
> Earl
>
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