Micro E-Mini Futures Course: Part 1

This course will provide insight into the Micro E-Mini futures, including a size comparison to classic E-Mini contracts, a look at enhanced exposure and the benefits Micro E-mini futures can offer you.

Micro E-Mini contracts enable you to more precisely hedge index exposure and manage your positions with more versatility, since Micro E-Mini futures are fungible with classic E-mini contracts. Even get examples of how to hedge more precisely with Micro E-Mini futures.

Micro E-Mini Futures Products Overview

CME Group has launched Micro E-mini futures contracts – a new smaller-sized suite of futures contracts for four major indices: S&P 500, Nasdaq-100, Russell 2000, and the Dow Jones Industrial Average. These contracts allow market participants an efficient and cost-effective way to gain exposure to four key indices. All four of the Micro E-mini futures are 1/10 the size of their respective E-mini futures counterparts – allowing all traders futures exposure without the notional constraints of the larger contracts.

For example, while a single E -mini S&P 500 futures contract has a value of $50 times the agreed upon E-mini futures price – the Micro E-mini S&P 500 futures contract has a value of $5 times the agreed upon price. The Micro E-mini contract multiplier varies by product.
While both the Micro E-mini S&P 500 and Micro E-mini Russell 2000 have multipliers of $5, the Micro E-mini Nasdaq-100 has a $2 multiplier, and the Micro E-mini Dow Jones Industrial Average has a 50-cent multiplier.

Example

If the S&P 500 Index is trading at 2750, the notional value of one Micro E-mini S&P 500 futures contract is $13,750.

Similar to the E-mini, the tick increments of the Micro E-mini S&P 500 are quoted in a quarter of one point, a one tick move in the Micro E-mini
S&P 500 equates to $1.25. A one-point move, which is four ticks, is worth $5.

This equates to a smaller, more affordable way to access one of the most liquid equity futures in the world.

The tick increment of the other three Micro E-mini contracts vary according to the contract multiplier.

Contract Specifications

The Micro E-mini futures contracts will trade Sunday 5 p.m. Central Time (CT) through Friday 4 p.m. CT, almost 24 hours per day.

Micro E-mini futures expire on a quarterly basis, settling in cash to the spot value of their respective Index on the third Fridays of March, June, September and December.

The Micro E-mini futures contracts operationally function and provide the same benefits as their E-mini counterparts, except for their smaller contract multiplier.

These benefits include:

• Portfolio diversification
• Capital efficiency
• Precision and flexibility in tailoring exposure and managing risk

 

Discover how a smaller, Micro E-mini futures contract opens the world to greater trading possibilities.

Continue To Part 2

DISCLAIMER: There is a substantial risk of loss in trading commodity futures and options products. Losses in excess of your initial investment may occur. Past performance is not necessarily indicative of future results. Please contact your account representative with concerns or questions.