Emini - The Best Market to Choose

S&P Emini Report

WHY ARE EMINI FUTURES SO POPULAR?

If you've discovered Emini Futures, you're already way ahead of most Traders. The question then becomes "Which one should I choose?" For some people, the term "Emini" means only one thing, the S&P 500. While it is by far the most popular and heavily traded of the Index Futures, it is not the only one.

Daytrading Margins

Most Brokers offer special margin rates for all Emini markets, not just the S&P. The average margin requirement for the day session which in most cases includes trading overnight on Globex is $500. Typically you will only be required to post full margin if you hold a trade open from one session to the next. If you are flat when Globex trading begins at 6 PM, even the trades you place on the overnight session still qualify for the advertised "day rate".

Check with your personal broker to make sure you understand the cost, and risk, before placing trades. Here is a list of margin requirements straight from the CME:

CME Maintenance Margin Requirements:

S&P 500 Emini (ES) $6,300.00

Dow Emini (YM) $6,050.00

Russell Emini (RTY) $3,575.00

Nasdaq Emini (NQ) $7,600.00

Again, most brokers do offer "special rates" for Day Traders. Without a doubt, this is the best-kept secret in the world of trading. One S&P 500 Emini Contract has a notional value which is calculated as follows:

Current Value of Index (2,970 as of 5 PM EDT 10/11/91) Multiplied by Point Value (ES pays $50 per point)

$2,970.00 X $50 = $148,500

As unbelievable as it may seem, it's true. For $500 you control $148,500.00 of S&P 500 best of breed equity. Trading 1 ES contract, when the value of the index changes by 1 Point you either earn or lose, $50. If you've been around a bit, you've probably heard the call of the wild which says "capture just 2 points a day in the ES and earn as much money as you want". However, at $50 per point, that's only $100 a day. Correct? Correct!

Multiple Contracts

If 1 contract and 2 points only earn you $100 a day, why is that a great thing? As traders gain experience and build their account size, they increase the number of contracts they trade at one time. Using the same math, 2 contracts can bring home $200 per day, 3 contracts $300, etc... Once you reach 5 contracts the numbers start to look more appealing. At 10 contracts the same 2 points are now worth $1,000 a day.

Caution

One of the most tragic mistakes new traders make is trading too many contracts too soon. Don't do it. If you want to learn how to trade for a living, slow and steady wins the race. Our Traders have a blueprint designed to grow your trading business from 1 contract to 20 over 24 months. Slow and steady! (continue reading)

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