CME Joins Battle for Retail Bond Traders With Micro Futures

CME Joins Battle for Retail Bond Traders With Micro Futures, Reports Bloomberg

Jun 28, 2021

By Bloomberg

"CME Group Inc., whose Treasury futures already dominate among pros, is now trying to lure small traders by offering simpler-to-understand contracts that focus on the numbers the masses care most about anyway: yields. The contracts, when they begin trading on Aug. 16, will rise when Treasury yields increase and fall when they decline -- whereas the existing futures move in the same direction as bond prices, a byzantine turnoff for many investors. The Micro Treasury Yield futures, which will compete with a similar set of products introduced last year by the Small Exchange, will come in 2-, 5-, 10- and 30-year versions. Their $10-per-basis-point price increment is much smaller than CME’s professionally targeted contracts and more digestible for retail traders" reports Bloomberg.

Don Roberts, president and CEO of The Small Exchange, said its Treasury products remain “a capital-efficient alternative” to CME’s because its combined fees and margin requirements will be lower.

The Small Exchange is making futures markets more accessible to more people with small, standard, and simple products that combine the best of futures and stocks.

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