The first thing you should realize is that E-mini features are one of the most important trading vehicles in the world. In short, the E-mini is a futures contract, which tracks the S&P 500 market index. They can be traded 23.5 hours every day, five days every week, using the ES symbol.
Every one-point move you make on the aforementioned S&P index is worth fifty dollars per E-mini contract, and the minimum move of these contracts is 0.25 points or twelve-and-a-half dollars. These contracts are available on a number of stock market indices in the United States.
However, when you hear a professional talking about E-mini contracts, they are probably thinking about the most important one – the E-mini contracts that follow the index of the S&P stock market. So, why are these futures contracts so significant?
Why Should You Trade E-Mini Futures?
E-minis are a great day training vehicle for traders across the globe. Naturally, they have a ton of benefits for the day and long-term traders alike:
They are easy to go short or long
For starters, a trader can just buy or sell their E-mini contract without any problems – this means there’s no plus tick rule. And if you’ve traded SPY ETF, you’d have to buy different ETFs altogether.
Practically all-day trading
As we mentioned before, you’re able to trade almost twenty-four hours per day. This is what makes E-minis so appealing to day traders. This enables you to make moves overnight in markets such as the FTSE or DAX with just one trading vehicle.
The depth of the market
You should know that the E-mini market is pretty liquid. Therefore, you have plenty of volume both sides of the latest price for large orders to be willed with little to no slippage.
With E-mini futures, you’re able to enter your orders in a matter of seconds and when those orders are executed, you’re notified almost instantly. Plus, if you need to cancel your orders, you don’t even need to make a phone call. You know where you stand every moment when you’re in a middle of a trade.
What do You Need to Start Trading E-minis?
Naturally, you want to know what margin you need to trade E-minis. The answer to this actually depends on the broker you want to trade through. There are three different amounts that really matter:
- Intraday Margin: If you want to start day trading, you’ll need at least 1,155 dollars and 2,625 dollars at the most, depending on the market volatility at the moment.
- Overnight Margin: On the other hand, if you want to trade during the after-hours or overnight sessions, you need anywhere between 4,620 and 5,250 dollars.
- The Minimum: In order to open an account, you’ll need somewhere between 5,000 and 10,000 dollars, again, depending on the broker you’re working with.
How Can You Start Trading?
People who want to start trading E-mini contracts need to open a futures brokerage account first. Keep in mind, this is not your ordinary trading account – different rules apply here – however, it works in the basically exact way.
The best options is probably the Interactive Brokers platform, because it’s 100% online. Even the application process is completely electronic. Of course, this is not your only option: both Ninja Traders and Trade Station offer good futures services.
What are some of the Best E-minis to Trade?
Since S7P E-mini contracts were such a success, exchanges such as the CME decided to launch a number of other E-mini contracts. And these cover more metals, forex, and metals, including:
- S&P Midcap 400
- S&P Smallcap 600
- Russell 1000
- NASDAQ 100
- NASDAQ Biotech
- NASDAQ Composite
But the original S&P 500 E-minis still dominate index futures. But you’re probably wondering, which E-minis are the best for trading? Honestly, you should opt for S&P 500, but if you’re interested in something else, you should also consider trading Dow and NASDAQ 100.