subject: The Interesting World Of Emini Futures [print this page] Emini futures give investors and short-term traders alike the opportunity to participate in the futures market without significant capital requirements. As the world of online trading continues to grow and expand, emini futures have helped develop the futures market from one dominated by major investment banks to a marketplace for individual investors.
Today, individual investors make up a substantial part of the futures market, thanks in part to inexpensive futures contracts.
What is So Special About Emini Futures?
Emini futures derive their name from two words: electronic and miniature. Emini futures are electronically traded miniature futures contracts. Emini futures are priced so that one point of the S&P500, for example, would be worth $50 at the end of the contract.
To elaborate, a 1 point change in the price of the S&P500 would be worth $50, either positive or negative, to the trader's account balance. Because emini futures are leveraged, investors need put up only the cost of the futures price itself.
Calculating Emini Futures Returns
A one point change in the price of the underlying futures contract is worth $50 per lot. Therefore, a .25 point change in the index traded is worth $12.50, up or down. A bullish contract owner would be credited a profit of $12.50 should the index rise .25 points, while a bearish emini futures contract owner would lost $12.50 on the same move. Of course, a full one point change would generate a profit or loss of $50.
Why Would I Want to Trade Emini Futures?
Emini futures allow investors to leverage up small accounts to trade much larger futures contracts. For this reason, even professional traders with large account balances tend to trade emini futures rather than the full futures contract. The emini market is also incredibly liquid due to the number of contracts that trade hands on a daily basis, which means investors can rest assured that they can enter and exit a single position as quickly as need be. Since most emini trades are both executed and completed in less than a day, liquidity is one of the most fundamental aspects of the emini marketplace.
A 24 Hour Marketplace
One of the best benefits to moving to emini futures is that the market is open 24 hours per day. Unlike the stock market which has the same open and close each day, futures trade around the clock, pricing in everything that happens while the stock markets are sleeping.
New investors should particularly enjoy this inherent feature of around the clock trading, as they can trade from the comfort of their own home at any time they wish. Such flexibility creates a healthy environment for both new traders and seasoned professionals alike to enter into the exciting market that is emini futures.
