Trading the Emini S&P 500 futures is a way to trade the CME future contracts electronically. The Emini is 1/5 of the size of the stanadard S&P 500 future contract but closely tracks the S&P 500 Index. It was originated when the price of the S&P contract was valued at approximately $500,000 which was too large for smaller traders. The Emini can be traded at all hours – though the standard market hours are known as the “normal” trading hours and are the most liquid (9:30am EST to 12:00pm EST). Other than the S&P Emini there are 44 other emini future contracts that can be traded. The ability to trade Emini futures was started back in 1997 and quickly became one of the most popular vehicles to trade on a short term basis.
There are two types of emini traders – those that trade via the internet either at home trading there own account or in businesses set up to trade the emini over the internet. Then the other form of trading (the original form) is trading in the pits or on the floor of the CME.
Benefits of Trading the Emini S&P 500 Futures or any other futures for that matter
- Lots of trading volume – can get in and out of a trade easily
- Good Volatility
- Can trade all hours
- Low Margin requirements
- Commissions are low
- No need to filter / research stocks –
- Focus on one chart
- Tax rate is lower and reporting requirements are minimal (do further research or consult your tax advisor)
4 Main Emini Symbols
S&P Emini = ES
Dow Emini = YM
Russell 2000 Emini = TF
Nasdaq 100 = NQ
Emini Contract Expiration
Emini contracts expire quarterly – They expire in the following months – March (H), June (M), September (U) and December (Z). The epiration is on the 3rd Friday of the above months. And if you are trading these contracts you will have to change the symbol of the contract you are trading based on the letters in (parentheses) above followed by the last two digits of the year you are in. So for example if its April 2012 and you are trading the S&P Emini you would be trading this symbol ESM12.
Emini price per tick
- Emini S&P 500 Futures trades in increments of .25 so each tick is worth $12.50 per contract traded. And each point = 4 ticks which equals $50.
- Russell 2000 Emini trades in increments of .10 so each tick is worth $10.00 per contract traded. 4 ticks would equal $40.
- Nasdaq 100 Emini trades in increments of .25 and each tick is worth $5. 4 ticks would equal $20.
So if you are looking to reduce your nightly scans and or stock research and are looking for a vehicle to day trade that has the volume and volatility then the emini s&P 500 futures may just be the way to go.