What is It?
E-Mini contracts are smaller electronically traded versions of the S&P 500 and NASDAQ 100 stock indexes. They are 1/5 the size of the larger institutional contracts. E-Minis are traded electronically on your PC.
Why Trade Them?
- Volatility creates opportunity to earn much more with lower account balances
- Broad market exposure for low cost
- You can hedge against your own portfolio
- You can be profitable regardless of market direction
- Tax advantage compared to stocks
The Case for Trading Futures: The Traders Have Voted!
In a little over 4 years, since inception, average daily volume of the E-mini S&P 500 has grown from 11,000 contracts to nearly 240,000 contracts.
Trading Advantages - Ease of use versus stocks
- Totally electronic platform with fast, efficient fills and virtually 24-hour trading
- "Round Trip" versus in-and-out commission
- Monitoring a few key indexes vs. dozens of stocks thus eliminating traditional stock picking and associated risks such as:
a. Pre-announcements
b. and now…accounting minefields
- Excellent profit potential
- Futures traders care about only 2 things:
a. an advancing market or
b. a declining market.
- Futures have more constant order flow and are usually much more friendly regarding bid/offer spreads.
What is 1 point of the E-mini NASDAQ 100 worth?
$20 per point per contract
For example: If the Nasdaq100 Index value is at 1800 and goes up 5 points to 1805 the difference is 5 points which equals $100.
$20 x 5 = $100 profit or loss per contract.
What is 1 point of the E-mini S&P 500 worth?
$50 per point per contract
For example: if the S&P 500 Index value is at 1500 and goes up 5 points to 1505 the difference is 5 points which equals $250.
$50 x 5 = $250 profit or loss per contract.
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