The futures markets offer a variety of advantages simply not found in other venues. Unquestionably, one of the largest is the diversity of trading alternatives available. No matter if you are an equity, currency or commodity trader, there is a product tailor-made for your expertise.
Among these offerings are the E-mini futures contracts listed for trade on the Chicago Mercantile Exchange (CME). Facing almost every major asset class, E-mini futures are a unique way of approaching the capital markets.
Trade The U.S. Indices With CME E-Mini Futures Contracts
By a wide margin, the most popular E-mini futures contracts are the equity index products listed on the CME. Featuring issues based upon the Dow Jones Industrial Average (DOW), Standard and Poor’s 500 (S&P 500), NASDAQ, and the Russell 2000, there is a product for every type of equities trader.
Even though the equity index E-minis face the U.S. stock market, they are not all the same. There are some key differences to be aware of, specifically in regards to the contract specifications:
| Product | Symbol | Asset Class | Tick Value |
|---|---|---|---|
| E-mini S&P 500 | ES | Large Cap Stocks | $12.50 |
| E-mini DOW | YM | Large Cap Stocks | $5.00 |
| E-mini NASDAQ | NQ | Tech Stocks | $5.00 |
| E-mini Russell 2000 | RTY | Small, Medium Cap Stocks | $5.00 |
About the only common denominator these four products share is their prefix. Each pertains to a specific sector of the U.S. stock market and presents a custom degree of leverage. In addition, the process of price discovery local to each contract is distinct. Below are two additional areas in which the equity index E-minis differ:
- Liquidity: Although the four U.S. equity index E-mini futures contracts are all liquid, some feature greater market depth than others. The E-mini S&P 500 is far and away the most heavily traded issue, regularly topping volumes of one million contracts per session; the other listings typically post volumes between 200K and 500. Accordingly, trade efficiency will vary as factors such as volatility and slippage fluctuate.
- Pricing Sensitivities: E-mini equity index futures are not a “one size fits all” way to trade the U.S. stock market. Offerings are sensitive to a collection of sector-specific underpinnings. Earnings reports, breaking news and various economic events can impact each product very differently. For instance, positive earnings reports from Apple and Amazon.com may boost the E-mini NASDAQ, while the E-mini DOW simultaneously lags due to a plunge in Boeing stock.
Don’t Forget About Commodity And Currency E-minis
Commodity and currency E-mini futures are traded by a broad spectrum of market participants for a variety of reasons. From active speculation to producer hedging, the CME’s lineup of commodity and currency E-minis are ideal targets for thousands of traders every day.
Below are a few of the more popular CME commodity and currency E-mini listings:
Here are the premier E-mini markets offered on the CME:
| Product | Symbol | Asset Class | Tick Value |
|---|---|---|---|
| E-mini Crude Oil | QM | Energy | $12.50 |
| E-mini Natural Gas | QG | Energy | $12.50 |
| E-mini Euro FX | E7 | Currencies | $6.25 |
| E-mini Japanese Yen | J7 | Currencies | $6.25 |
In comparison to the CME’s equity index E-mini futures contracts, the currency and commodity offerings trade with vastly reduced liquidity. However, many tried-and-true strategies remain viable, including intraday, day, and swing trading methodologies. Although volume and depth-of-market can be sporadic, active periods regularly offer a collection of opportunities.
Getting Started With E-mini Futures
One of the great things about futures is that the trader has an ability to fully customize risk exposure. No matter if you prefer full-sized CME futures or the granularity of E-micro, Micro E-mini, and E-mini products, rest assured that there is an ideal substitute for your needs.
To become an active participant in E-mini futures, check out the service suite available at Daniels Trading. Featuring broker-assisted and self-directed options, dt has everything you need to get started in these exciting markets.
