What Is the E-mini S&P 500?
The term E-mini S&P 500 refers to an electronically-traded futures and options contract on the Chicago Mercantile Exchange (CME). Launched by the CME in 1997, the E-mini S&P 500 is open to all investors. It allows them to hedge their bets or speculate on the price movements of the index. The contract is cash-settled and is priced at $50 times the value of the S&P 500. Its value is one-fifth of the now-delisted standard-sized S&P 500 futures contract.
Key Takeaways
- The S&P 500 E-mini is a futures contract that is based on the S&P 500 index.
- It was the first E-mini index futures contract launched by the CME in 1997.
- The E-mini S&P 500 is priced at $50 times the value of the index.
- It offers ease of trading, low volatility and margin rates, liquidity, as well as greater affordability
- Investors and traders can use these contracts as a hedge or a way to speculate on the index's movement.
Understanding the E-mini S&P 500
The S&P 500 index tracks the 500 largest U.S. publicly traded companies by market value and is one of the most common benchmarks for the broader U.S. equity markets. Futures are financial contracts that obligate the trader to buy or sell an asset at a predetermined price by a set date. Futures contracts detail the quality and quantity of the underlying asset and are standardized to facilitate trading on a futures exchange. Some futures contracts may call for physical delivery of the asset, while others are settled in cash.
The CME developed a series of standard contracts that were typically only available to institutional investors. With more investors seeking alternative investment options, the exchange launched a smaller set of futures contracts called E-mini. They make futures trading accessible to a variety of traders, including retail investors.
E-mini contracts are traded on the CME and other international exchanges. They cover a variety of assets, including:
- Indexes: S&P 500, Dow Jones Industrial Average (DJIA), Nasdaq 100, Russell 2000, FTSE 100, Hang Seng
- Commodities: Oil, wheat, copper, gold, soybeans, natural gas, corn
- Currencies: Euro
The contract size of an E-mini is the value of the contract based on the price of the futures contract times a contract-specific multiplier. The E-mini S&P 500 has a contract size of $50 times the value of the S&P 500. So if the S&P 500 is trading at 2,580, the value of the contract would be $129,000 ($50 x 2,580).
In order to trade E-minis, investors must open an account with a brokerage firm. As noted above, traders often use the E-mini S&P 500 to hedge their bets on the index or to speculate on movements. And because they offer round-the-clock trading, low volatility, margin rates, liquidity, and greater affordability, many active traders view the E-mini S&P 500 as an ideal trading instrument for the index.
The E-mini S&P 500 is the most actively traded E-mini contract in the world.
Special Considerations
All futures strategies are possible with E-minis, including spread trading. This is a strategy that investors and traders can use to speculate on financial markets. A spread is the difference between a buy and sell price. The smaller the spread, the cheaper the trade. Conversely, a larger difference between prices indicates a more expensive trade.
E-mini trading volumes eclipsed those of the standard contract when it was delisted, indicating the E-minis popularity among individual and institutional investors alike. Both favored the E-mini for its high liquidity and the ability to trade a substantial number of contracts.
The S&P 500 E-mini can move quickly, especially during high-impact news releases, so it's always recommended that traders have significantly more than the minimum required day trading margin in their account to help avoid margin calls or having positions liquidated by the broker.
Many traders suggest that only 1% to 2% of account equity should be risked on any single trade. In this case, the trader is risking $525. Therefore, if they want to keep the risk to 1% to 2% of their account balance, they should have at least $26,250 to $52,500 in their account ($525 x 50 and $525 x 100).
E-mini S&P 500 Contract Specifications
The E-mini S&P 500 trades on CME Globex under ticker ES. It has standardized specifications, which allows for easy trading. Electronic trading takes place between 6 p.m. Sunday and 5 p.m ET. Friday with a daily maintenance break between 5 p.m. and 6 p.m. ET.
Contracts are available quarterly with March, June, September, and December expiry dates. They are financially- or cash-settled contracts, which means traders receive a cash credit or debit based on the contract's settlement price. As such, the S&P index or stocks don't need to be delivered if the contract is held until expiration.
As mentioned in the previous section, the value of the contract is $50 x the S&P 500 index value. What matters to most traders is the minimum price fluctuation and tick value, as this is what determines profit or losses on the contract. The E-mini moves in 0.25 point increments, and each one of those increments equates to $12.50 on one contract. Therefore, a one-point move, which is four ticks, means $50 is gained or lost.
History of the E-mini S&P 500
The CME introduced the standard-sized stock index futures contract in 1982. This first contract was based on the S&P 500 and traded on the CME under the Globex ticker SP. The price for the full-sized contract was $250 times the value of the S&P 500. This means if the index value was 2,500, the contract was worth $250 times that amount, or $625,000.
This was great for large, institutional investors who used the standard contract as a hedge or a speculative tool. But the value of the full-sized S&P 500 contract was too large for most small traders, many of whom were interested in these contracts as alternative investments.
In response to this demand, the CME launched the first E-mini contract in September 1997. Like the standard-sized contract, the first E-mini was based on the S&P 500. Its value was one-fifth that of the full-sized contract.
Both contracts functioned in the same fashion. Investors and traders used them both for hedging and speculating. The E-mini just opened up the landscape for smaller investors to take part.
The daily settlement prices for the E-minis are essentially the same as those of the regular-sized contract, though they may differ slightly because of rounding. This means that a position with five E-mini S&P 500 futures contracts has the same financial value as one full-sized contract in the same contract month.
The CME delisted the standard- or full-sized contracts for S&P 500 futures and options in September 2021.
Example of an E-mini S&P 500 Trade
Let's assume that the S&P 500 is trading at 2,965 and a trader seeks a breakout above the 2,970 on the E-mini S&P 500 where a short-term resistance area has formed. They believe that if the price can break above that level, it will travel to 3,000.
When the price moves above 2,970, they purchase one contract. Assuming they get a price of 2,970.50, they place the following:
- A stop loss at 2,960, resulting in a risk of 10.5 points. Each point is worth $50, so the risk to the trader is $525 ($50 x 10.5).
- A limit order to sell at their target level of 3,000. If the target is reached, the profit is $1,475 ($50 x (3,000 - 2970.50).
The trader is not required to buy the full contract, which has a value of $148,525 ($50 x 2,970.50) at the time of purchase. They must instead only put up a margin. If the trader only holds onto the position for the day, they are only required to post a day trading margin. With some futures brokers, this can be as low as $400.
In this case, the trader could lose $525 on the trade, plus commissions, so if the margin is $400, the trader would want to have at least $925 plus the cost of commissions in their account.
How Does the E-mini S&P 500 Work?
The E-mini S&P 500 is a derivatives contract based on the S&P 500 index. It is open to any type of investor, including individual and institutional investors. The contract allows investors to hedge or speculate on the movement of the index. Contracts are priced at $50 times the value of the S&P 500 and are available quarterly. E-mini index futures are cash-settled, which means you receive a credit or debit rather than delivery of the underlying asset.
How Can I Trade E-mini S&P 500 Futures?
In order to trade E-mini S&P 500 futures, you must open an account with a brokerage firm. Once you do that, choose your trading strategy and monitor the market until the contract's expiration date.
What Is the Size of the E-mini S&P 500 Futures Contract?
E-mini S&P 500 futures contracts are valued at $50 times the S&P 500. So if the S&P is trading at 2,000, the contract value is $50 x 2,000, or $100,000.
FAQs
These contracts are agreements between buyers and sellers to exchange money based on the value of the S&P 500 stock index. The contract size is equal to $50 multiplied by the S&P 500 index. For example, if the S&P 500 is at 4,000 points, the value of one E-Mini contract would be $200,000 ($50 x 4,000).
What is an example of an E-mini S&P 500 futures? ›
Example of an E-mini S&P 500 Trade
When the price moves above 2,970, they purchase one contract. Assuming they get a price of 2,970.50, they place the following: A stop loss at 2,960, resulting in a risk of 10.5 points. Each point is worth $50, so the risk to the trader is $525 ($50 x 10.5).
What is E-mini S&P 500? ›
What are E-mini S&P 500 futures? E-mini S&P 500 futures are traded on the Chicago Mercantile Exchange (CME) and allow traders to gain exposure to the S&P 500 index, a widely recognized barometer of the U.S. stock market.
What is E-mini S&P 500 strategy? ›
What is an E-mini S&P 500 futures strategy? An E-mini S&P 500 futures strategy is a method or technique for trading the S&P 500 futures market. It would include technical and fundamental analyses for market timing, position sizing, and risk management.
How does E-mini trading work? ›
E-mini futures or e-minis are futures contracts that cost a fraction of their underlying futures contracts. Hence, their trading prices are lower in comparison to traditional futures contracts. Because these contracts are entirely electronic, they are known as 'E'-minis.
How do E-mini S&P 500 futures work? ›
The E-mini S&P 500 futures contract tracks the S&P 500 Index. It trades on the Chicago Mercantile Exchange under the ticker symbol ES. The contract tracks the stock prices of the largest U.S. companies listed on the S&P 500 Index.
What is the difference between E-mini and spy? ›
Execution - E-mini's are traded nearly 24/7 during the weekdays on the CME Globex system, whereas the SPY is only traded during normal and extended US exchange trading hours (6am-8pm EST). 3. Leverage - In trading futures the margin requirements are different from those in the equity markets.
What is an example of an e-mini? ›
Definition and Example of an E-Mini
The contract size is equal to $50 multiplied by the S&P 500 index. For example, if the S&P 500 is at 4,000 points, the value of one E-Mini contract would be $200,000 ($50 x 4,000).
How much money do you need to trade Emini futures? ›
There is no legal minimum on what balance you must maintain to day trade futures, although you must have enough in the account to cover all day trading margins and fluctuations which result from your positions. These can vary by broker however some require as little as $500 to open an account.
How many Emini contracts can I trade? ›
How Many E-mini Contracts Can I Trade? Theoretically, you can trade as many E-mini contracts as your account balance allows you. Because E-mini contracts are traded on margin ($500/contract) you can trade more contracts with less money.
The Micro E-mini S&P 500 futures contract is $5 x the S&P 500 Index and has a minimum tick of 0.25 index points.
What are the benefits of trading Emini futures? ›
The Micro E-mini's small size brings a variety of potential benefits to retail traders: Portfolio diversification for less: With futures, you can take on long or short exposure to an entire index of stocks for far less money than it would take to buy or short the same stocks or even the associated index-tracking funds.
What is the difference between S&P 500 and S&P 500 ESG? ›
Intentionally broad—including over 300 of the original S&P 500 companies—the S&P 500 ESG Index seeks to reflect many of the attributes of the S&P 500 itself, while providing an improved sustainability profile as a result of an updated ESG Score.
What is the best Emini strategy? ›
Click here to learn more about Swing Trading Strategies. The best Emini trading strategy requires to hold your trades to the close. Don't try to get in and out scalping ES futures because when you have a loss most likely it will eat all the previous profits. Instead, try to catch a trend move and hold it to the close.
Who trades Emini futures? ›
The Emini (or E-mini or ES or Mini) is a futures contract that tracks the S&P 500 stock market index. It is traded on the Chicago Mercantile Exchange (CME) via their Globex electronic trading platform.
How do you make money with ETrade? ›
ETrade makes money through offering discounted brokerage services to stock traders, investors, financial professionals, and other individuals. ETrade earns payments from orders and collects interest that it earns on the free float.
What are the best hours to trade E-mini? ›
Premarket Hours
The period runs from 7:30 AM to 9:30 AM EST. Premarket hours are an important time for traders of index futures, such as the E-Mini S&P 500 and the E-mini Nasdaq 100 futures.
How much does 1 es contract cost? ›
commodity info
| Barchart Symbol | ES |
|---|
| Exchange Symbol | ES |
| Contract | E-Mini S&P 500 Index |
| Exchange | CME |
| Tick Size | 0.25 points ($12.50 per contract) |
8 more rows3 days ago
Benefits of Trading E-mini S&P 500 Futures Contracts
Great market depth and liquidity allows for rapid online order execution with minimal slippage and makes it difficult to manipulate by large players. No up-tick rule.
Which ETF is better than SPY? ›
What's the best S&P 500 ETF?
| ETF | Ticker | 5-year return |
|---|
| Vanguard S&P 500 ETF | VOO | 56.21% |
| SPDR S&P 500 ETF Trust | SPY | 56.20% |
| iShares Core S&P 500 ETF | IVV | 55.84% |
May 1, 2023
SPY stock owns the stocks in the S&P 500, which is the most popular index. But other ETFs own stocks in other indexes such as small stocks and mid-sized stocks. You can also buy ETFs that only own growth stocks or beat-up stocks called value stocks.
What ETF is most similar to SPY? ›
The Vanguard 500 Index Fund Admiral Class (VFIAX) and the SPDR S&P 500 ETF (SPY) are similar investment products. Both track the S&P 500, a U.S. stock index comprising 500 companies with the largest market capitalizations.
What is the real range of E-mini? ›
MINI Electric has a range of up to 145 miles, but this will vary according to driving habits and environmental conditions. How you drive can make a big difference to your available range and how quickly your charge is used.
What are the performance figures of the Mini E? ›
Performance
| Acceleration 0 - 62 mph | 7.3 sec |
|---|
| Top Speed | 93 mph |
| Electric Range | 110 mi |
Micro E-mini futures contract specifications. S&P 500 futures: 0.25, worth $1.25 per contract. NASDAQ-100 futures: 0.25, worth $0.50 per contract. Dow Jones futures: 1.00, worth $0.50 per contract.
Can I trade futures with $100? ›
To fund your futures trading account, you can start with as little as $100 USD.
Do you need $25,000 to day trade futures? ›
Minimum Account Size
A pattern day trader who executes four or more round turns in a single security within a week is required to maintain a minimum equity of $25,000 in their brokerage account. But a futures trader is not required to meet this minimum account size.
Can you make a living day trading futures? ›
By focusing on a single market, you can get up to speed quicker. Trading futures for a living is a compelling idea — but to do it successfully, you'll need sufficient startup capital and a well-designed trading plan.
Can you make a living trading es? ›
Trading E-Mini Futures for a Living Is Possible
Being a professional futures trader can be a very rewarding experience, both personally and financially. To learn more about the many opportunities that trading futures offers, schedule your free one-on-one consultation with a member of the Daniels Trading team today.
Can you only day trade 3 times a week? ›
You're generally limited to no more than three day trades in a five-trading-day period, unless you have at least $25,000 of equity in your account at the end of the previous day.
Similar to the expiration date, the final settlement time varies by product. For example, natural gas options on futures cease trading at 2:30 p.m. ET, when the outright futures contract settlement price is determined. However, the Monday weekly options on futures for the E-mini S&P 500 expire at 4 p.m. ET.
How much is a micro E-mini S&P 500 point worth? ›
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.
Who has the highest profit margin in the S&P 500? ›
Intercontinental Exchange is the most profitable company in the S&P 500. Its adjusted net profit margin is an enviable 49.4%.
How much are E-mini S&P 500 futures worth? ›
Recent Contracts
| Last | Chg |
|---|
| E-Mini S&P 500 Future Dec 2024 | $4,440.00 | 0.00 |
| E-Mini S&P 500 Future Mar 2025 | $4,462.00 | 0.00 |
| E-Mini S&P 500 Future Jun 2025 | $4,477.00 | 0.00 |
| E-Mini S&P 500 Future Dec 2025 | $4,522.00 | 0.00 |
6 more rowsThe major disadvantages include no control over future events, price fluctuations, and the potential reduction in asset prices as the expiration date approaches.
What happens when an E-mini futures contract expires? ›
Many financial futures contracts, such as the popular E-mini contracts, are cash settled upon expiration. This means on the last day of trading, the value of the contract is marked to market and the trader's account is debited or credited depending on whether there is a profit or loss.
Why trading futures is better than stocks? ›
What trading futures essentially means for the investor is that they can expose themself to a much greater value of stocks than they could when buying the original stocks. And thus their profits also multiply if the market moves in his direction (10 times if the margin requirement is 10%).
How do I know if my investments are ESG? ›
Look at ESG Scores
Companies that offer these services include S&P Global, Sustainalytics, MSCI and Refinitiv. Stock research companies like Morningstar also offer ESG ratings.
Are big ESG funds doing worse than the S&P 500? ›
The average large-cap stock ESG fund had lost nearly 20% in 2022 through Dec. 21, according to Morningstar. That's about 2.4 percentage points worse than the drop in the S&P 500 Index , including dividends.
What is better S&P 500 Index Fund or ETF? ›
ETFs are more tax-efficient than index funds by nature, thanks to the way they're structured. When you sell an ETF, you're typically selling it to another investor who's buying it, and the cash is coming directly from them. Capital gains taxes on that sale are yours and yours alone to pay.
For example, if a trader has $4,000 in cash in their account, they can buy ES contracts worth $8,000 if they plan on holding the position overnight. However, if they plan on selling the contract before the end of the day, that trader could buy $16,000 worth of ES contracts.
What are the best times to trade ES futures? ›
The Best Futures Trading Hours in Energy:
European trading closes at 11:30 AM EST. The best hours for trading are the most liquid, between 9:00AM and 11:30AM. Pit session closes at 2:30PM EST, when floor trading stops for the day.
What is the most profitable stock trading strategy? ›
Scalping is one of the most popular strategies. It involves selling almost immediately after a trade becomes profitable. The price target is whatever figure means that you'll make money on the trade. Fading involves shorting stocks after rapid moves upward.
What is an example of an E-mini trade? ›
Example of an E-mini S&P 500 Trade
When the price moves above 2,970, they purchase one contract. Assuming they get a price of 2,970.50, they place the following: A stop loss at 2,960, resulting in a risk of 10.5 points. Each point is worth $50, so the risk to the trader is $525 ($50 x 10.5).
Can you trade E-mini on TD Ameritrade? ›
Once you've decided on what you want to trade, placing it is simple. Head on over to the Trade tab on thinkorswim, go to Futures Trader, enter the symbol, and you'll be on your way to buying and selling Micro E-minis.
What is a micro E-mini trading strategy? ›
A micro E-mini futures strategy is a method or technique for trading micro e-mini futures contracts. It is employed by traders with small trading capital and often includes technical and fundamental analyses for market timing, position sizing, and risk management.
Is 500 dollars enough to invest in stocks? ›
Buy Fractional Shares of Stocks
Through fractional share investing, $500 can go a long way towards building a diversified portfolio of stocks. Previously, if you wanted to buy a larger company's shares, ordinarily that would cost hundreds to thousands of dollars per share.
Can you buy S&P 500 on E-Trade? ›
Getting Started. Your first step before investing in the S&P 500 is to open an account with a brokerage firm such as Scottrade, E-Trade, Fidelity, Charles Schwab and TD Ameritrade. Most brokerages have simple online platforms, and you can buy and sell most types of investments for a per-transaction fee.
What percent does E-Trade take? ›
Stocks, options, and ETFs
| Debit Balance | Margin Rate |
|---|
| Less than $10,000 | 13.95% (2.50% above base rate) |
| $10,000 to $24,999.99 | 13.70% (2.25% above base rate) |
| $25,000 to $49,999.99 | 13.45% (2.00% above base rate) |
| $50,000 to $99,999.99 | 12.95% (1.50% above base rate) |
2 more rowsRecent Contracts
| Last | Chg |
|---|
| E-Mini S&P 500 Future Mar 2024 | $4,328.75 | 44.50 |
| E-Mini S&P 500 Future Jun 2024 | $4,326.25 | 6.25 |
| E-Mini S&P 500 Future Sep 2024 | $4,351.00 | -5.00 |
| E-Mini S&P 500 Future Dec 2024 | $4,376.00 | 0.00 |
6 more rowsE-mini S&P 500 futures and options on futures offer traders around the world a fast, efficient way to access the S&P 500 Index, the key benchmark for large-capitalization U.S. stocks. Highly liquid and fully electronic, these contracts have established CME Group as the leading provider of stock-index futures.
How much money do you need to trade E-mini? ›
There is no legal minimum on what balance you must maintain to day trade futures, although you must have enough in the account to cover all day trading margins and fluctuations which result from your positions. These can vary by broker however some require as little as $500 to open an account.
How many E-mini contracts can I trade? ›
How Many E-mini Contracts Can I Trade? Theoretically, you can trade as many E-mini contracts as your account balance allows you. Because E-mini contracts are traded on margin ($500/contract) you can trade more contracts with less money.
What are the benefits of trading E-mini futures? ›
The Micro E-mini's small size brings a variety of potential benefits to retail traders: Portfolio diversification for less: With futures, you can take on long or short exposure to an entire index of stocks for far less money than it would take to buy or short the same stocks or even the associated index-tracking funds.
What are the margin requirements for e-mini S&P 500 futures? ›
The initial margin requirement on E-mini S&P 500 futures contracts is $5,060 with a maintenance margin of $4,600. The overnight initial minimum is another thing to take into consideration when trading E-minis.
What is the difference between futures and mini futures? ›
An E-Mini is a futures contract that is one-fifth the size of a typical futures contract. An E-Mini is a futures contract that is one-fifth the size of a typical futures contract. Index futures typically involve large amounts of money, so E-Minis serve as a vehicle for investors who want to trade smaller amounts.
What are the margin requirements for S&P e-mini futures? ›
For example, if an E-mini S&P 500 Index futures contract (/ES) has an initial margin requirement of $6,600 and a maintenance margin of $6,000, buyers or sellers must have $6,600 in their account to enter the contract and need to keep at least $6,000 in their account to stay in the position.
What is Emini futures trading? ›
An e-mini is a standard futures contract that is broken down into a fractional portion of a stock index. E-mini futures are traded electronically, hence the name e-mini. E-minis are heavily traded on the Chicago Mercantile Exchange (CME) where e-minis were first introduced (on September 9, 1997).
What is Etrade S&P 500 Index Fund symbol? ›
ETSPX:US. E*TRADE S&P 500 Index Fund.
Who trades E-mini futures? ›
The Emini (or E-mini or ES or Mini) is a futures contract that tracks the S&P 500 stock market index. It is traded on the Chicago Mercantile Exchange (CME) via their Globex electronic trading platform.
Click here to learn more about Swing Trading Strategies. The best Emini trading strategy requires to hold your trades to the close. Don't try to get in and out scalping ES futures because when you have a loss most likely it will eat all the previous profits. Instead, try to catch a trend move and hold it to the close.
