| The Emini Futures Universe |
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| Written by Barry Taylor |
| Wednesday, 05 May 2010 16:35 |
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Investors with limited amounts of investment capital have the chance to get into the coveted futures market with inexpensive emini futures. With online trading becoming significantly popular, emini futures have also grown to be a powerhouse among the trading community.
Investors with limited amounts of investment capital have the chance to get into the coveted futures market with inexpensive emini futures. With online trading becoming significantly popular, emini futures have also grown to be a powerhouse among the trading community. Even investors with small amounts of cash to risk can find a niche in the futures market and start earning the day they set up an emini futures account. Tell Me About Emini Futures The word emini futures is a combination of the words electronic, miniature and futures. Putting all the terms together, you get a product very much like normal futures, albeit much smaller in size, that are traded electronically through an online broker. They are traded proportionally to futures, with an emini contract costing only a portion of the size of a full scale contract. Emini futures are worth $50 per point change in the index being traded. 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. Figuring Your Earnings in Emini Futures Since a one point move in the price of the index is worth $50 per lot, a .25 point change in the index would be worth $12.50 on your account balance. Investors can both long and short the market, allowing for the opportunity to profit when the price rises or falls, and earning $12.50 per contract, per .25 point change. As always, a move of 1 point is worth $50 in either direction, and it is worth that much regardless of the amount paid for the emini futures contract. Why Should You Be Interested In Emini Futures? Emini futures are a favorite among investors who do not have enough capital to purchase a regular futures contract, or those who enjoy the additional risk of leveraged returns. Many professional traders tend to trade emini futures instead of regular futures for the purpose of accessing leverage to boost profit potential. Thanks to overwhelming interest in the markets, from amateur and professional traders alike, the emini futures markets have significant liquidity to buy and sell on short notice. This turnaround time allows for investors to open and close trades within the same day, even minutes if necessary. Trade Around the Clock If you have been trading stocks for any period of time, you should be accustomed to a trading day that spans only six hours and 30 minutes. By contrast, emini futures are open to trade 24 hours around the clock, and these often price stocks for the next day well before the stock markets are open. The 24 hour trading clock creates a secondary market, whereby all the information released before and after the markets are closed can be priced into the futures market, bringing the market to an equilibrium price at all times. 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. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. About the Author: Learn about how you can profit from trading emini futures through free indicator resources, as well as helpful guidance, from Barry Taylor. Yahoo! Finance, TradeStation, NinjaTrader, Reuters, and more have discussed his website, http://www.Emini-Watch.com |