E-Mini S&P 500 Index Trading
Many times you will see E-mini along with “S&P 500.” E-mini S&P 500 (ES) is the full name, and is one example of an e-mini contract. Although it is just one example, it is also the most popular out of them all.
S&P is an e-mini contract that is traded on the GLOBEX platform of the Chicago Mercantile Exchange. S&P was not always an e-mini. Before 1997 the S&P contract was just too big for traders, at $500 times more than the index. In order to meet the needs of day traders, the Chicago Mercantile Exchange implemented the new value to that of $50 times the S&P 500 index.
The e-mini S&P 500 was much more doable for those trading due to the decreased size. The advantage of this is that traders can track the direction of the market rather than the success of individual stocks. This allows traders to take advantage of any movement up, down, or sideways in the market, and buy when they want and sell when they want. They are more in control, rather than just seeing how the individual stocks are doing on their own.
Like most e-minis, S&P 500 follows a quarterly expiration cycle, which begins in the month of March. The other three important months of the cycle are June, September, and December. ES trades 5 days a week for 23.25 hours each day.
Some of the other popular e-minis include 30 year US Treasury Bond, mini silver, mini gold, E-mini Nasdaq 100 Index, E-mini Dow Jones Industrial average, E-micro Australian Dollar, E-micro Eurodollar, and mini Russell 200 Index. The futures range from foreign currency to oil to bonds and more.
This type of trading has a lot more benefits, which is evident in the fact that the market changed the value of a stock specifically to meet the needs of e-mini traders. Working from home with just a computer and an internet connection is very convenient. The ability to have control over purchases and sales gives traders more reassurance in the money they are investing. Another benefit of e-minis is that trading takes place just during the day, so you watch the market, make your purchases and sales, and wrap up for the day. The next day you start fresh, so you do not have to worry about anything major happening overnight that affects your actions.