Beginner's Guide To E-Mini Futures Contracts: What Are The E-Minis?
  1. Beginner's Guide To E-Mini Futures Contracts: Introduction
  2. Beginner's Guide To E-Mini Futures Contracts: What Are The E-Minis?
  3. Beginner's Guide To E-Mini Futures Contracts: E-Mini Characteristics
  4. Beginner's Guide To E-Mini Futures Contracts: E-Mini Specifications
  5. Beginner's Guide To E-Mini Futures Contracts: Who Trades The E-Minis?
  6. Beginner's Guide To E-Mini Futures Contracts: Trading The E-Minis
  7. Beginner's Guide To E-Mini Futures Contracts: Other E-Mini Contracts

Beginner's Guide To E-Mini Futures Contracts: What Are The E-Minis?

An "e-mini" is an electronically traded futures contract that represents a portion of a standard futures contract. As futures contracts, the e-minis represent an agreement to buy or sell the cash value of the underlying index at a specified future date. The contracts are sized at a certain value multiplied by the futures price; this value depends on the particular e-mini. The e-mini S&P 500, for example, has a contract size of $50 times the e-mini S&P 500 futures price. If the value of the e-mini S&P 500 is $1,320, the value of the contract is $66,000 ($50 x $1320). The value of the contract changes as the price of the futures moves.

Mini contracts are available on a range of products, including indexes, metals, forex and commodities. Generally, however, investors and traders are referring to the e-mini stock index futures - and in particular, the e-mini S&P 500 - when discussing "e-minis."

A stock index is a statistic that reflects the composite value of a selected group of stocks. The S&P 500, for example, is an index comprised of 500 stocks chosen for market size, liquidity and industry grouping. The Dow Jones Industrial Average, on the other hand, is an index made up of 30 of the largest and most influential companies in the United States. Stock index futures allow traders to buy and sell the strength of an entire cash index without having to own every individual stock, making them a practical trading instrument. Each stock index future trades on a multiple of the underlying cash index, and because they are not based on a tangible commodity, they are settled in cash.

SEE: The ABCs Of Stock Indexes

The Chicago Mercantile Exchange (CME) introduced the first e-mini product on Sept. 9, 1997 when it launched the e-mini S&P 500. This smaller cousin of the S&P 500 enabled more participation in the stock index futures markets because it traded at one-fifth the size of the full-sized contract, making it much more affordable to individual investors and traders.

The daily settlement prices for the e-mini contracts are the same as the regular-sized contract (based on contract month). As a result, a position with five e-mini S&P 500 futures contracts (that each trade at one-fifth the size of the full-sized contract) has the same financial value as one full-sized contract in the same contract month (assuming both positions are on the same side of the market).

The most popular e-mini stock index futures contracts include the:

  • E-mini S&P 500 (ES)
  • E-mini NASDAQ-100 (NQ)
  • E-mini Dow (YM)
  • E-mini S&P MidCap 400 (EMD)
  • E-mini Russell 2000 (TF)
The ES, NQ, YM and EMD are electronically traded on the CME Globex platform, while the TF trades on the Intercontinental Exchange (ICE) electronic trading platform.

Beginner's Guide To E-Mini Futures Contracts: E-Mini Characteristics

  1. Beginner's Guide To E-Mini Futures Contracts: Introduction
  2. Beginner's Guide To E-Mini Futures Contracts: What Are The E-Minis?
  3. Beginner's Guide To E-Mini Futures Contracts: E-Mini Characteristics
  4. Beginner's Guide To E-Mini Futures Contracts: E-Mini Specifications
  5. Beginner's Guide To E-Mini Futures Contracts: Who Trades The E-Minis?
  6. Beginner's Guide To E-Mini Futures Contracts: Trading The E-Minis
  7. Beginner's Guide To E-Mini Futures Contracts: Other E-Mini Contracts
RELATED TERMS
  1. E-Mini

    An electronically traded futures contract on the Chicago Mercantile ...
  2. Contract Unit

    The actual amount of the underlying asset represented by a single ...
  3. Index Futures

    A futures contract on a stock or financial index. For each index ...
  4. Contract Size

    The deliverable quantity of commodities or financial instruments ...
  5. Futures Contract

    A contractual agreement, generally made on the trading floor ...
  6. Job Lot

    A futures contract with a minimum trading unit smaller than the ...
RELATED FAQS
  1. How do S&P 500 futures work?

    Learn about the mechanics of S&P 500 futures contracts, a type of stock index future introduced by the Chicago Mercantile ... Read Answer >>
  2. What do the S&P, Dow and Nasdaq futures contracts represent?

    Every morning before North American stock exchanges begin trading, TV programs and websites providing financial information ... Read Answer >>
  3. How is fair value calculated in the futures market?

    Learn how the fair value for futures stock index contracts is calculated, and understand how differences between those numbers ... Read Answer >>
  4. How do futures contracts roll over?

    Learn about why futures contracts are often rolled over into forward month contracts prior to expiration, and understand ... Read Answer >>
  5. How can I calculate the notional value of a futures contract?

    Learn how the notional value of a futures contract is calculated, and how futures are different from stock since they have ... Read Answer >>
  6. How do the investment risks differ between options and futures?

    Learn what differences exist between futures and options contracts and how each can be used to hedge against investment risk ... Read Answer >>

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