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E-Minis: The Perfect Vehicle During Market Volatility

September 26, 2019 by Daniels Trading| Tips & Strategies

Volatility can arise suddenly, destroying winning trades and shaking the markets to their core. Successfully navigating turbulent financial waters can be an epic challenge ― finding the ideal instrument to trade is a key part of excelling when the road becomes rocky. 

During times of chaotic price action, the best trading vehicles are those that limit risk while preserving opportunity. The E-mini lineup of products offered by the Chicago Mercantile Exchange (CME) and participating futures brokers do just that, giving traders a means to deal with the unexpected.

Putting Volatility in Check With the E-minis

If you’re already in the market or looking to become involved, then the E-minis may be your avenue to prosperity during volatile periods. Listed primarily on the CME, E-mini futures are an electronically traded collection of products that offer diversity, flexibility, and limited risk exposure to active traders.

Diversity

No matter if you’re an equities, currencies, metals, or energies trader, the E-minis are suitable instruments that are both liquid and active. Here is a brief look at the CME’s popular catalogue of E-mini futures:

Product Symbol Asset Class
E-mini S&P 500 ES Equities Index
E-mini NASDAQ 100 NQ Equities Index
E-mini DOW YM Equities Index
E-mini Russell 2000 RT Equities Index
E-mini WTI Crude Oil QM Energies
E-mini Natural Gas QG Energies
E-mini Gold GC Metals
E-mini Copper QC Metals
E-mini Euro FX E7 Currencies
E-mini Japanese Yen J7 Currencies

These products are routinely available to clients across the gamut of futures brokers, from full-service to self-directed outlets.

Flexibility

One of the strongest benefits of E-minis is the flexibility they offer traders. Many types of strategies are feasible, from short-term scalping to multi-session swing trading. No matter the type of trader you are, the E-minis can fit into your plan for capitalizing on market volatility.

Conventional wisdom tells us that increased pricing volatility equals enhanced risk. The beauty of the E-minis is that wild price action may be readily tamed in any number of ways. Here are two of the most powerful:

  • Safe-haven exposure: As many futures brokers will tell you, acquiring safe-haven assets is one way to avoid a financial catastrophe during times of extreme uncertainty. For example, E-mini gold offers traders the ability to go long on bullion via a cost-effective and financially settled investment vehicle.
  • Active shorting: When the markets take a turn south, E-mini futures give opportunistic traders a chance to profit from selling high and buying low. In the event Wall Street hits the panic button, actively shorting the Dow Jones Industrial Average, NASDAQ, and S&P 500 may be easily accomplished.

Helter-skelter markets can make even the most seasoned investor shiver. Through the flexibility of E-mini futures, you don’t just have to weather the storm ― you can prosper.

Whether prices are rising or falling, our experts are here to help you  discover opportunities  in the futures markets across all major asset classes.Sign up for a  consultation.…

Reduced Capital Exposure

The calling card of heightened volatility is wild, unpredictable fluctuations in asset pricing. Due to this primary characteristic, trading in such times is best accomplished by implementing limited leverage.

E-mini futures give traders the ability to engage the markets without assuming extraordinary financial commitments. Conversely, investing in traditional stocks and mutual funds frequently becomes capital intense endeavors. With the 50% margin requirements outlined by Regulation T of the Federal Reserve Board, open positions in stocks are often heavily vested. 

On the other hand, E-mini equity products facing the DJIA, S&P 500, and NASDAQ give traders the ability to capitalize on the vastly reduced margin requirements offered by most futures brokers. This is important because you can put a smaller amount of money, rather than your entire portfolio, in harm’s way in an attempt to realize gains.

Make Sure Your Futures Brokers Offer the E-minis!

The E-minis are powerful products that open the door to a wide variety of asset classes. Reduced margins and a diversity of offerings promote flexibility seldom found in a single security. If you’re going to trade during times of market volatility, then the E-minis are definitely worth a look.

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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