Finance Resources
Investment Planning
Stock Market
Futures & Options
Mutual Funds
Home » Mini Futures

Mini Futures

Mini futures are the truncated versions of large-sized stock index futures contracts that are traded on the Chicago Mercantile Exchange (CME). They are available for a broad range of indices, such as the S&P 500, Russell 2000 and NASDAQ-100.

Electronically traded mini futures are called E-mini and were first introduced on the CME in September 1997.

Mini futures are used by individual investors for participating and profiting from the benchmark index. The margins required by these mini futures contracts are significantly lower than that for normal stock index futures contracts. For example, the margins required by a mini S&P 500 futures contract is about 20% of that of the S&P 500 futures contracts.

How are Mini Futures Traded?

Mini futures contracts are agreements to buy or sell the cash value of the specified index at a specified future date. These contracts are valued at 50 times the futures price. For example, if the mini futures price is at $100, the value of the contract would be $5,000 (50 * 100).

The tick (also known as the minimum price movement) of the contract is 0.25 of the index points. Like their larger counterpart, mini futures are settled in cash and there is no delivery of the individual stocks.

Benefits of Mini Futures

The benefits of using mini futures are:

  • They can be used for hedging against unexpected market fluctuations.

  • Since electronic trading is followed for these mini futures, they can be traded easily from any remote location at any time.

  • They are affordable, since an investor does not have to purchase an entire stock index futures contract.

  • Investors do not need to maintain a high cash balance in their day trade account to conduct day trading in an index.

Drawbacks of Mini Futures

Mini futures are dependent on fluctuations in the price of the shares indexed in the related stock index. Therefore, these are prone to market volatility and involve a high level of risk.

Moreover, an investor has access to 15 to 20 times the amount of cash they have on hand. Thus, a trader can lose all the funds available to him/her quickly in the absence of successful stop strategies.



Managed Futures, Futures, Financial Options, Options and Futures, Investment Option, Index Futures, Gold Futures, Currency Options, Benefits of Currency Options, investment planning, Risks of Currency Options, Benefits of Corn Futures, Risks of Corn Futures, Corn Futures, Benefits of Corn Futures, Risks of Corn Futures

Domain Registration | Windows Hosting | Linux Hosting | Java Hosting | Virtual Dedicated Server | Dedicated Server | Reseller Web Hosting | Unlimited Windows reseller hosting | Unlimited Linux reseller hosting | Cheap Windows reseller hosting | Cheap Linux reseller hosting | Cheap Windows hosting | Best Windows hosting | Windows hosting Multiple Domains | Unlimited Windows hosting | Compare hosting plans | Cheap Linux hosting | Best Linux hosting | Linux hosting Multiple Domains | Unlimited Linux hosting | Cheap asp.net hosting | Best asp.net hosting | unlimited asp.net hosting | Cheap asp.net reseller hosting | Unlimited asp.net reseller hosting | Java Features | Cheap Java hosting | Best Java hosting | unlimited Java Hosting | Unlimited Linux reseller hosting | Java Hosting Multiple Domains| | Matargashti Full Song | Matargashti mp3 Download | Matargashti Video Download | Matargashti Song Tamasha | Prem Ratan Dhan Payo Songs Download | Prem Ratan Dhan Payo Songs mp3 Download | Prem Ratan Dhan Payo Songs Video Download | Pinga Song Download | Pinga Full Song mp3 Download | Pinga Song mp3 Download | Pinga Song Video Download | Latest Bollywood Updates | Bollywood Updates | Prem Ratan Dhan Paayo Songs Download|
© ProfitGuruOnline-2024. All Rights Reserved.