What Are E-minis?

E-minis are electronically traded futures contracts that represent a smaller fraction of the value of standard contracts and are popular for trading indexes, commodities, and currencies. Introduced by the Chicago Mercantile Exchange (CME) in 1997, E-minis cater to individual investors seeking affordable entry into the futures market.

Traded on the CME and other exchanges, E-minis enable investors to hedge risks or speculate on price movements. The launch of the first E-mini contract was a milestone, providing accessibility and affordability previously limited to institutional investors.

Understanding E-minis

Futures contracts, including E-minis, involve agreements to buy or sell assets at a set future date and price. Initially exclusive to institutional investors due to large sizes, E-mini contracts like the S&P 500 opened doors for average traders to participate.

Various E-mini contracts now cover assets like indexes (e.g., S&P 500), commodities, and currencies, with the E-mini S&P 500 ranking as the most traded globally.

E-minis vs. Full-Sized Futures

E-mini contracts mirror full-size futures, offering opportunities for investors to manage risks and speculate on asset price changes. They are favored for their accessibility and popularity, often surpassing full-sized futures in trading volume.

E-mini S&P 500 Futures Contract Specifications

E-mini contracts are one-fifth the size of standard contracts, facilitating easier trading for investors. For instance, the E-mini S&P 500 contract values are based on the futures price and a specific multiplier.

Trading as ES on the CME Globex platform, the E-mini S&P 500 operates nearly 24/7, offering quarterly contracts and trading hours from Sunday to Friday.

Advantages and Disadvantages of E-minis
Advantages

E-minis appeal to active traders due to their all-day trading, low margins, volatility, liquidity, and cost efficiency compared to standard contracts.

Conversely, E-minis can be highly volatile and have a narrower asset selection than some traditional investment options like ETFs or mutual funds.

Pros

• Low costs and affordability

• Nearly 24/7 trading

Cons

• Highly volatile

• Limited selection of contracts

What Is an E-mini S&P 500?

The E-mini S&P 500 is a smaller electronically traded futures contract based on the now-delisted standard S&P futures. Representing the S&P 500 stock index, the E-mini S&P 500 is a leading indicator for U.S. large-cap equities.

How Much Does an E-mini S&P 500 Contract Cost?

The E-mini S&P 500 is priced at $50 times the value of the S&P 500, making it an affordable option for traders looking to enter the futures market.

How Much Money Do You Need to Trade E-mini Futures?

There is no legal minimum balance required to day trade futures, but you should have sufficient funds in your account to cover margins. Some brokers may require as little as $500 to open an account.

How Much Is a Micro E-mini Futures Contract?

Micro E-mini futures offer a more affordable alternative to E-minis, with contract prices being a fraction of the index value, making them accessible to a wider range of investors.