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.
