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A Breakdown of the Micro E-Mini Equity Futures Contract

March 20, 2020 by Daniels Trading| Tips & Strategies

Granularity is defined as “the state or quality of being composed of many individual pieces or elements.” In the world of fund managers, the term is used in reference to diversification. For active futures traders, granularity is all about managing exposure.

One way to limit the risks of trading the U.S. stock market is through Micro E-mini equity futures. Listed on the Chicago Mercantile Exchange (CME), this exciting lineup of products offers participants many strategic options. No matter if you specialize in trading small-cap or blue-chip stocks, the Micro E-minis have a contract that is right up your alley.

Breaking Down Micro E-Mini Equity Futures

The U.S. stock markets are the world’s benchmark for wealth, stability, and prosperity. Accounting for about 54.5 percent of global equities value, the New York Stock Exchange (NYSE) and NASDAQ are the top two international stock markets in terms of capitalization.

Leading U.S. Indices

The NYSE and NASDAQ feature vast liquidity and an abundance of corporate listings. To measure the relative performance of these companies, baskets of stocks are valued in a weighted average format or indexed. CME Micro E-mini equity futures are based on four of the most popular U.S. equities indices:

  • Dow Jones Industrial Average (DJIA, DOW): The DOW is composed of the 30 largest “blue-chip” stocks on the NYSE and NASDAQ.
  • Standard & Poor’s 500 (S&P 500): The S&P 500 is a cross section of the 500 most prominent large-cap exchange-traded stocks.
  • NASDAQ 100 (NASDAQ): The NASDAQ is a tech-oriented equities index. It features around 100 of the most prominent companies on the NASDAQ exchange.
  • Russell 2000 (RUT): The Russell 2000 is focused on a broad collection of small-cap or “growth” companies.

Each of these index products serves a unique purpose for stock market traders and investors. Given the diversity of their offerings, it is possible to engage the small-cap, mid-cap, and large-cap sectors of the U.S. stock market.
Want to learn more about E-mini trading basics? Read our guide, Introduction to E-Mini Stock Index Futures >>

The CME’s Micro E-Mini Equities Indices

Stock market derivatives are an exceedingly popular mode of trade or investment. Aside from exchange-traded funds (ETFs) and options, the leading indices are targeted by a variety of equities-based futures contracts. The most commonly traded are the ever-popular E-mini and Micro E-mini products.

Here is a look at the CME’s lineup of Micro E-mini equities futures contracts:

Contract Symbol Intraday Margin Maintenance Margin
Micro E-mini S&P 500 MES $100 $760
Micro E-mini DOW MYM $100 $680
Micro E-mini DOW MYM $100 $680
Micro E-mini DOW MYM $100 $680

Micro E-mini equity futures offer traders a contract that is one-tenth the size of the conventional E-minis. This is a key advantage when customizing risk exposure. To illustrate this point, consider the differences in tick values and margin requirements between the E-mini and Micro E-mini NASDAQ 100:

Contract Tick Value Intraday Maintenance
E-mini NASDAQ $5.00 $500 $9,000
Micro E-mini NASDAQ 100 $0.50 $100 $900

The beauty of Micro E-mini equity futures is that they open the door to a vast number of trading strategies. Reduced tick values and margin requirements allow you to stretch your risk capital regardless of the market’s condition. Whether you’re trading during periods of calm or volatility, the Micro E-minis offer truly customizable granularity and risk exposure.

Getting Started with U.S. Stock Index Futures

To learn more about how equities index futures can help you trade the U.S. stock market, check out Daniels Trading’s free e-book Introduction to E-Mini Stock Index Futures. It will provide you with a comprehensive view of the U.S. indices from an active trader’s perspective.
Want to learn more about E-mini trading basics? Read our guide, Introduction to E-Mini Stock Index Futures>>

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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