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How To Trade Futures Using The E-minis

May 7, 2019 by Daniels Trading| Futures 101

Update – this post was written before the launch of CME’s newest product – the Micro E-Mini. Here’s a link to a Micro E-mini resources page.

Whether you’re a veteran of the markets or just getting your feet wet, the question of “how to trade futures” is a crucial one. Strategy, resources, and goals all figure into the final answer — one that is unique to each individual. Deciding exactly how to trade futures can be a daunting task.

However, the good news is that the futures markets offer a vast array of opportunities and alternatives, suitable for almost any trader’s situation. One of the most popular ways of becoming involved is through the E-mini products listed for trade on the Chicago Mercantile Exchange (CME). Featuring contracts based upon the equity, metal, ag commodity, and energy asset classes, CME’s E-mini lineup of products provides active traders a collection of unique advantages.

Why Trade the E-minis?

The primary goal of anyone in the financial markets is simple: make money. Futures offer almost infinite opportunities, limited only by a trader’s imagination. E-mini products are extremely useful in the pursuit of profitability, due largely to the following key benefits:

  • Variety of offerings: From equities indices to ag commodities, E-minis offer a variety of products to active traders. If you have expertise in stocks, metals, currencies, or agriculture, the E-minis can help you capitalize on your expertise.
  • Liquidity: Not unlike standard futures contracts, each E-mini product exhibits a specific market depth. A broad spectrum of liquidity levels are represented, ranging from the extreme depth of the E-mini S&P 500 to the typically thin E-mini copper market.
  • Limited exposure: Maintenance and intraday margin requirements are typically much less than the standard or “full-sized” contracts. As an example, E-mini gold futures require a maintenance margin of $1,700 and an intraday margin of $935. In comparison, full-sized gold futures require $3,400 for maintenance and $1,500 for intraday trading.
  • Financially settled: One element of certain E-minis especially beneficial to active traders is that many of the contracts are settled financially instead of via physical delivery. This is important because it effectively eliminates any unplanned liabilities arising from being contractually obligated to assume delivery of an underlying asset.

The E-minis offer traders a wide range of affordable alternatives to their full-sized counterparts. Featuring reduced margins and a significant variety of offerings, the E-minis can be a valuable addition to any derivatives portfolio.

The E-mini Product Lineup on the CME Globex

Developing a comprehensive game plan regarding how to trade futures is an important undertaking, and one that needs to be completed before you ever place a trade. If you’re in the process of crafting a plan for the markets, the E-mini lineup of products available on the CME Globex is certainly worth taking a close look at.

Here are some of the CME Globex’s most commonly traded E-mini futures products:

Product Symbol Asset Class Exchange
E-mini S&P 500 ES Equities CME
E-mini DOW YM Equities CBOT
E-mini NASDAQ NQ Equities CME
E-mini WTI Crude Oil QM Energies NYMEX
E-mini Natural Gas QG Energies NYMEX
E-mini Gold QO Metals COMEX
E-mini Silver QC Metals COMEX
E-mini Copper QC Metals COMEX
Mini Corn YC Agriculture CBOT
Mini Soybean YK Agriculture CBOT
Mini Chicago SRW Wheat YW Agriculture CBOT
E-mini Euro FX E7 Currencies CME
E-mini Japanese Yen J7 Currencies CME

Learn How to Trade Futures Using the E-minis

As in all markets, each E-mini product is unique. To trade them successfully, you should implement a robust strategy that accounts for relative volatility, liquidity, and seasonal trends in pricing. Having a comprehensive plan in place before entering the live market is an integral part of achieving your trade-related goals.

Many of the benefits available via the E-minis make them an ideal venue for learning how to trade futures. For more information on what E-mini futures can do for you, schedule a no-obligation consultation with a market professional at Daniels Trading today.

Micro E-Mini Comparison Guide

Filed Under: Futures 101

About Daniels Trading

Daniels Trading is an independent futures brokerage firm located in the heart of Chicago’s financial district. Established by renowned commodity trader Andy Daniels in 1995, Daniels Trading is built on a culture of trust committed to the firm’s mission of Independence, Objectivity and Reliability.

Risk Disclosure

This material is conveyed as a solicitation for entering into a derivatives transaction.

This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.

Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.

You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.

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Risk Disclosure

This material is conveyed as a solicitation for entering into a derivatives transaction.

This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.

Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.

You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.

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