E-mini futures trading is a specialized type of derivative futures index trading. E-minis are small futures contracts on the S&P 500 index, the NASDAQ 100 index, Russell 2000, or the Dow 30 index. It’s a way for small individual investors to participate in the broad movements of the market. The lure of index futures trading is the excitement of pitting yourself against the broad market, not individual stock issues. Trading e-minis allows even relatively small investors to try their hand.
Phenomenal growth in the value of S&P 500 futures has put contract prices — $70,000+ per contract — beyond the means of many individual investors. The e-mini lets traders get in on the action on a scaled down version of the big S&P 500 futures market, as well as the NASDAQ and Dow indexes. Designed for individual investors, e-mini contract values are 50 times the underlying index, (at current levels you control $70,000 with only $500 in margin. All mini contracts are1/5 the size of a big contract. Offering leverage of up to 100:1 and virtually 24/5 trading hours, e-minis have the potential to reap huge rewards.
As with other day-traded futures, e-mini accounts are adjusted daily to reflect profits and losses. On e-minis the minimum price movement of a contract — called a tick — is smaller than with the big indexes, just .25 index points, or $12.50 per contract. A one-point move (4 ticks) would, therefore, be $50 per contract (12.50 x 4 ticks). Not enough to kill you if your system fails.
Trading e-minis is an excellent way to move into index futures trading. You get all of the excitement without as much financial risk. Trading e-minis allows you to hone your skills and refine your system, we can show you how. Visit the Futures Trading Secrets website to find out how you can use e-minis to your advantage.
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