The longer expirations on micro S&P options are gone for now.
The Chicago Mercantile Exchange is moving its Micro E-mini S&P 500 options to financial settlement. Financially settled means cash settled, so at expiration, there’s no futures contract to deal with. You just get the cash.
The new contracts only list short-dated expirations, though, and the longer ones went away. Some of you have emailed me about it, and on some platforms, you can only go out about 53 days right now.
Nobody freak out.
I’ve talked to CME directly. They’ll add longer expirations back, but it could take 6 to 8 weeks to get them up and running. I asked them, politely, for quarterly expirations, like December, March, June and September.
Until then, plan your MES trades around the shorter dates. I can’t re-up some of my longer trades yet either, so I’m waiting right along with you.
How do I know this before most brokers do?
At TheoTrade, we help CME and Cboe with their products. When something new is coming, they’ll call and ask whether we think it’ll work, and we get input on the details.
I’ve worked with these people for 15 to 20 years, going back to the days when we shared boxes at Wrigley Field and Bears games.
I don’t think there’s another education firm on the planet that the exchanges pick up the phone for.
Those same calls are how I know what’s coming next. Cboe plans to launch KPI contracts, pending regulatory approval. KPI stands for key performance indicator, a key metric inside a company.
Instead of betting on a stock’s price, you could trade on whether Tesla hits its delivery numbers. Cboe says it will start with about 23 companies.
Exchanges are also working on perpetuals, which are futures contracts that never expire, so you never have to close one and open the next before it runs out. As long as they have good markets, I’ll trade anything.
When the new expirations, contracts, and technology goes live, we’re among the first to trade them in TheoLive.
If you’re not a member yet, here’s the link to get started.
To your success,
Don Kaufman
