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Why Trade S&P Emini Futures?

September 3, 2019 by Daniels Trading| Tips & Strategies

Traders and investors from every corner of the globe consider the Standard & Poor’s 500 (S&P 500) as an ideal way of engaging the broader U.S. equities market. In response to the public interest, the Chicago Mercantile Exchange (CME) offers S&P Emini futures to individuals wanting to take their shot at one of the premier equities products in the world.

Five Reasons You Should Be Trading S&P Emini Futures

Alongside the Dow Jones Industrial Average (DJIA) and NASDAQ, the S&P 500 is a preferred destination for traders and investors alike. First published in 1957, it’s a weighted index based on the stock price of 500 large-cap companies listed on U.S. exchanges. The S&P 500 includes components from 75% of the aggregate U.S. equities market, earning it a reputation as being a “total market proxy.”

The S&P Emini futures (ES) contract listed on the CME captures the spirit of the S&P 500’s large-cap stability while providing traders with several advantages over traditional stock trading. Here are five of the biggest benefits — each a great reason to become involved in this exciting market.

#1 Efficiency

If you’re searching for ways to boost your trade-related efficiency, then look no further than S&P Emini futures. Daily traded volumes regularly exceed 1 million on the front-month contract, ensuring maximum liquidity and a robust depth-of-market. As a result, adverse factors such as slippage are minimized, and efficient trade is promoted.

#2 Leverage

For many active traders, the availability of leverage is a critical aspect of conducting day-to-day business. Emini S&P 500 futures provide purchasing (or shorting) power on a much larger scale than in traditional stocks. With intraday margin requirements as low as $500 per contract, the Emini S&P 500 offers participants the opportunity to take sizeable positions with only a fraction of the capital required by equities products.

#3 Low Barriers to Entry

The contemporary digital marketplace has given retail traders from all walks of life an ability to participate in the world’s most popular markets. Modest margin requirements, reduced commissions/fees, and remote exchange connectivity are a few reasons why legions of professional traders turn to futures instead of engaging indices or stocks directly. If you have a bit of risk capital, computing power, and an internet connection, then the odds are very good that you will be able to trade S&P Emini futures.

#4 Flexibility

In contrast to stocks, futures afford the trader superior strategic flexibility. You can profit from being either long or short the market, as well as buying or selling contracts frequently. Naked shorting or high volume strategies are typically off-the-table in conventional equities trading unless you’re well-capitalized and privy to unique brokerage service.

#5 Volatility

Futures products are priced with respect to what an asset’s value is perceived to be at an upcoming point in time. Accordingly, prices regularly exhibit sensitivity to vast array of factors. Breaking news items, economic events, and contract expiration are all capable of influencing the process of price discovery and heightening periodic volatilities.

The public nature of the S&P 500 ensures consistently high levels of participation and, in turn, enhanced volatility. Subsequently, traders are able to capitalize on significant swings in Emini S&P 500 pricing on a near-daily basis.

Getting Started with the Emini S&P 500

For more than 50 years, the S&P 500 has been a staple of American finance. It’s viewed as being a benchmark of U.S. stock market value, as well as a ripe target for active traders.

If you’re interested in engaging the S&P 500 via S&P Emini futures, check out the service suite available at Daniels Trading. Featuring a broad spectrum of trading options, Daniels Trading has everything you need to tackle the futures markets in a broker-assisted or self-directed capacity.

Micro E-Mini Comparison Guide

Filed Under: Tips & Strategies

About Daniels Trading

Daniels Trading is division of StoneX Financial Inc. located in the heart of Chicago’s financial district. Established by renowned commodity trader Andy Daniels in 1995, Daniels Trading was built on a culture of trust committed to a mission of Independence, Objectivity and Reliability.

Risk Disclosure

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

© 2023 StoneX Group Inc. All Rights Reserved

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Risk Disclosure

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

© 2023 StoneX Group Inc. All Rights Reserved

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