I have visited the chat room recently and was surprised that no one was familiar with or trading the Euro FX contract. For information purposes, thought I would start a thread here for current and future use.
In a nutshell, the EC is similar to the Eur/Usd in Forex trading. The obvious big difference being that the EC is traded at the CME and is under the same regulations as the other contracts being traded there. I personally do not touch Forex due to the lack of regulation currently there. The EC provides a way to trade in currencies with the same futures brokerage account you currently have and diversify into currencies.
Here is a link to the CME site on the EC: CME Euro FX Futures & Options
In my trading, here are my observations on this contract:
• It has the potential to trend much more than the US indexes.
• Each tick is $12.50, so if you like the ER2 at $10/tick, this may be of interest to you.
• It does not move in conjunction with the indexes, thereby providing an instrument to trade that is ‘independent’ of the US indexes. For me, this has provided trading opportunities when the indexes are not providing much action.
• The volume is good – approx. 150,000 contracts per day currently. This is more than YM or ER2.
• Commissions are slightly higher than on the indexes since this is a full-sized contract, not a mini. There is a mini-EC; however, the volume there has never taken off. While the commissions are higher, any good broker will negotiate based on your expected trading volume and they ARE NOT that much more than indexes, regardless of what your broker may tell you.
• Depending on your charting platform, you may already have this feed or need to turn it on.
I have traded the EC for well over one year now, and it is a perfect addition to the indexes that so many of us trade. While the Forex arena is not for me, this contract provides a way to enter the currency market without entering something so unregulated. Now, once the CME FX Marketplace is up and running, that may be a different story (Reuters and CME To Create FXMarketSpace).
Good Trading!
Note: Some charting services do not use EC for the ticker symbol. When you do a symbol lookup, make sure to seach for the Euro FX contract, not the mini.