Emini Trading – Everything Explained

Emini trading is the process of actively engaging in speculation of equity futures.  For the most part when people refer to emini futures trading they are talking about the S&P e-mini.  This is because the S&P emini is the largest of all of the emini products offered by the exchanges.  The S&P emini is one fifth the size of the pit traded contract with each point representing 50 dollars vs. the pit traded contract value of 250 dollars.

When the S&P emini, or referred to as the ES by its ticker symbol, was introduced in 1997 it became extremely popular because it introduced a whole new group of investors to futures trading because the margin requirements were much less than the pit traded contract.  Volume is massive on the ES which provides day traders with great liquidity.  The ES is designed to track the S&P 500 index or perhaps the S&P 500 index is designed to track the S&P futures.  There’s much debate because sometimes the evidence favors one side and other times it favors the other.

Trading emini futures provides the small investor with an opportunity to day trade the entire market with very little out of pocket exposure.  The ES not only helps the small investor but it also helps the professional traders too.  It’s much easier for institutional traders to manage the emini contracts that are traded electronically vs. the pit traded contracts so there’s no denying the growth in the emini contracts.

There are several forms of emini trading that the individual investors can pursue.  The most common is the pure day trade which involves opening and closing positions all within the confines of the normal trading hours (for the ES this is 8:30 AM – 3:15 PM Central Time).  Those who follow this method are commonly referred to as ‘Day Traders’.  Another popular form of emini trading is swing trading.  In this example the emini trader initiates positions that are designed to be held for one to several days in hopes of capturing a larger move in the market.  These greater price objectives also carry greater risk since the exposure increases proportionately.  There’s great debate as to which method of emini trading is best.  The most important thing is to be comfortable when initiating an emini futures position.  Each person has their own risk tolerance and it’s imperative that they adhere to predefined trading plans.

Each exchange establishes margin requirements for both day trading and swing trading purposes that each emini trader must follow.  The ES is traded at the Chicago Mercantile Exchange in Chicago.  You can visit their website for the most recent margin rate requirements. All of the emini trading signals are objective and are based on statistical odds.  I highly advise you to take a look at this emini trading system.