The Big Thing – Micro Futures Trading
The CME Group launched Micro E-mini futures contracts on May 5, 2019 - These contractsallow market participants to gain exposure to price fluctuations in the S&P 500, Russell 2000,Dow Jones 30 and Nasdaq100 indices at a much lower cost than the existing e-minifutures.Depending on which clearing house you use, you can go long or short markets like theS&P500 and Nasdaq100 with as little as $50 of day-trading margin per contract, offering aneffective way to hedge your overall portfolio
Part of the beauty of Micro Futures Trading is that all four of the Micro E-mini futures are 1/10 the size of their respective E-mini futures counterparts. This allows all traders futures exposure without the notional constraints of the larger contracts.
Some things to keep in mind for Micro Futures Contract Trading, is that while a single E -mini S&P 500 futures contract has a value of $50 per each point, the Micro E-mini S&P 500 futures contract has a value of $5 per each point.
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 futurescontract is $13,750.
Similar to the E-mini, the tick increments of the Micro E-mini S&P 500 are quoted in a quarterof 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 inthe world.
The tick increment of the other three Micro E-mini contracts vary according to the contractmultiplier.
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Micro Futures Contract Sizes
Futures contracts come in three varieties: regular, mini, and micro.
The relationship between these three is as follows:
- Regular = 1
- Mini = 1/2
- Micro = 1/10th
Mini futures are the most commonly traded for indexes, such as the S&P 500 or Nasdaq 100. Howevermicro futures have become increasingly popular across all asset classes including currencies.
Normally, futures contracts control an enormous amount of notional currency. For example, onecontract on the U.S. Dollar British Pound Sterling pair controls 62,500 pounds.
Micro currency futures contracts control 1/10th the amount of regular contracts, allowing moreflexibility and control while maintaining the same capital efficiency.
With the expansion of micro futures contract trading into currencies, traders can create more comprehensive speculation and hedging strategies across multiple asset classes with different correlations.
MICRO WTI CRUDE OIL FUTURES
| CONTRACT SIZE | 0.1 ether |
| RATIO TO STANDARD CONTRACT | 1/10 |
| MINIMUM TICK/ PRICE FLUCTUATION | $0.50 per ether |
| DOLLAR VALUE OF ONE TICK | $0.05 per contract |
| PRODUCT CODE | MET |
| SETTLEMENT | Financial |
| EXPIRATION SCHEDULE | 4:00 p.m. London time on the last Friday of the contract month. |
| TRADING HOURS | CME: Sun-Fri: 5 p.m. to 4 p.m. Mon-Fri: 60-minute daily trading halt beginning at 4 p.m. CT |
| LISTING EXCHANGE | CME |
MICRO GOLD FUTURES
| CONTRACT SIZE | 10-oz |
| RATIO TO STANDARD CONTRACT | 1/10 |
| MINIMUM TICK/ PRICE FLUCTUATION | $0.1 per troy ounce |
| DOLLAR VALUE OF ONE TICK | $1.00 per contract |
| PRODUCT CODE | MGC |
| SETTLEMENT | Deliverable |
| EXPIRATION SCHEDULE | 12:30 p.m. CT on the third last business day of the contract month. |
| TRADING HOURS | COMEX: Sun-Fri: 5 p.m. to 4 p.m. Mon-Fri: 60-minute daily trading halt beginning at 4 p.m. CT |
| LISTING EXCHANGE | COMEX |
MICRO SILVER FUTURES
| CONTRACT SIZE | 1000 oz |
| RATIO TO STANDARD CONTRACT | 1/5 |
| MINIMUM TICK/ PRICE FLUCTUATION | $0.01 per troy ounce |
| DOLLAR VALUE OF ONE TICK | $10.00 per contract |
| PRODUCT CODE | SIL |
| SETTLEMENT | Deliverable |
| EXPIRATION SCHEDULE | Trading terminates at 12:00 Noon CT on the third last business day of the month prior to the contract month. |
| TRADING HOURS | COMEX: Sun-Fri: 5 p.m. to 4 p.m. Mon-Fri: 60-minute daily trading halt beginning at 4 p.m. CT |
| LISTING EXCHANGE | COMEX |
MICRO COPPER FUTURES
| CONTRACT SIZE | 2500 pounds |
| RATIO TO STANDARD CONTRACT | 1/10 |
| MINIMUM TICK/ PRICE FLUCTUATION | $0.0005 per pound |
| DOLLAR VALUE OF ONE TICK | $1.25 per contract |
| PRODUCT CODE | MHG |
| SETTLEMENT | Financially Settled |
| EXPIRATION SCHEDULE | 12:30 p.m. CT on the third last business day of the contract month. |
| TRADING HOURS | NYMEX: Sun-Fri: 5 p.m. to 4 p.m. Mon-Fri: 60-minute daily trading halt beginning at 4 p.m. CT |
| LISTING EXCHANGE | NYMEX |
MICRO INDICES
| Micro E-mini Nasdaq-100 | Micro E-mini Russell 2000 | Micro E-mini Dow | ||
|---|---|---|---|---|
| Contract Size | $5 x S&P 500 Index | $2 x Nasdaq-100 Index | $5 x Russell 2000 Index | $0.50 x DJIA Index |
| Trading Hours and Venue | CME Globex: Sun-Fri: 5pm to 4:00pm | |||
| Minimum Tick/ Price Fluctuation | Outright 0.25 Index points | 0.25 Index points | 0.10 Index points | 0.50 Index points |
| Dollar Value of One Tick | $1.25 per contract. | $0.50 per contract. | $0.50 per contract. | $0.50 per contract. |
| Product Code | CME Globex: MES CME ClearPort: MES Clearing: MES | CME Globex: MNQ CME ClearPort: MNQ Clearing: MNQ | CME Globex: M2K CME ClearPort: M2K Clearing: M2K | CME Globex: MYM CME ClearPort:MYM Clearing: MYM |
| Contract Months | Five months in the March Quarterly Cycle H, M, U, Z, H (March, June, September, December, March) | |||
| Delivery | Cash settlement to Final Settlement Price | |||
| Termination of Trading | 8:30 a.m. CT on 3 rd Friday of contract delivery month Trading in expiring futures terminates at 8:30 am on Last Day of Trading. | |||
MICRO BITCOIN
| CONTRACT SIZE | 0.10 bitcoin |
| TRADING HOURS | CME Globex: Sunday - Friday 6:00 p.m. - 5:00 p.m. ET (5:00 p.m. - 4:00 p.m. CT) with a 60-minute break each day beginning at 5:00 p.m. ET (4:00 p.m. CT) CME ClearPort: 6:00 p.m. Sunday to 6:45 p.m. Friday ET (5:00 p.m. - 5:45 p.m. CT) with a15-minute maintenance window between 6:45 p.m. - 7:00 p.m. ET (5:45 p.m. - 6:00 p.m.CT) Monday - Thursday. |
| MINIMUM PRICE FLUCTUATION | Outrights: $5 per bitcoin = $0.50 per contract Spreads: $1 per bitcoin = $0.10 per contract |
| PRODUCT CODE | MBT |
| LISTING CYCLE | Six consecutive monthly contracts inclusive of the nearest two December contracts. |
MICRO TREASURY YIELD
| MICRO 2-YEAR YIELD FUTURES | MICRO 5-YEAR YIELD FUTURES | MICRO 10-YEAR YIELD FUTURES | MICRO 30-YEAR YIELD FUTURES | |
|---|---|---|---|---|
| PRODUCT CODE | 2YY | 5YY | 10Y | 30Y |
| SETTLEMENT | Cash-settled toBrokerTec 2-Yearbenchmark | Cash-settled toBrokerTec 5-Yearbenchmark | Cash-settled toBrokerTec 10-Yearbenchmark | Cash-settled toBrokerTec 30-Yearbenchmark |
| PRICE CONVENTION | US Treasury Yield | |||
| CONTRACT SIZE | $10.00 DV01 | |||
| TICK SIZE | $1.00 (1/10 of 1 bp) | |||
| # OF EXPIRIES | 2 nearest monthly contracts | |||
| TERMINATION | Last Business Day of Month | |||
MICRO FX
| Micro AUD/USD | Micro USD/CAD | Micro USD/CHF | Micro EUR/USD | Micro GBP/USD | Micro INR/USD | Micro USD/JPY | |
|---|---|---|---|---|---|---|---|
| UNDERLYING CURRENCY | Australian dollars | US Dollar | US Dollar | Euros | Britishpounds | Indianrupees | US Dollar |
| CONTRACT SIZE | 10,000AussieDollars | 10,000 USDollars | 10,000 USDollars | 12,500Euros | 6,250Pounds | 1M Rupee | 10,000 USDollars |
| RATIO TO STANDARDCONTRACT | 1/10 | 1/10 | 1/10 | 1/10 | 1/10 | 1/10 | 1/10 |
| MINIMUM TICK/ PRICE FLUCTUATION | 0.0001 USD | 0.0001 CAD per USD | 0.0001 CHF per USD | 0.0001 USD per EUR | 0.0001 USD per GBP | 0.01 USD per INR | 0.01 JPY per USD |
| VALUE OF ONE TICK | $1 percontract | 1 CAD percontract | 1 CHF percontract | $1.25 percontract | $0.625 percontract | $1 percontract | 100 JPY percontract |
| PRODUCT CODE | M6A | M6C | M6S | M6E | M6B | MIR | M6J |
| SETTLEMENT | Physical | Physical | Physical | Physical | Physical | Financial | Physical |
| TRADING HOURS | Sunday - Friday 5:00 p.m. - 4:00 p.m. CT with a 60-minute break each day beginning at 4:00 p.m. CT | ||||||
Micro Futures Contract Trading Options
Micro Bitcoin
Micro WTI Crude Oil
Micro Gold futures
Micro Silver futures
Micro Copper futures
Micro Treasury Yields
Micro Forex(FX) Futures
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I'm an expert in financial markets and trading, particularly in futures contracts and derivatives. I've spent years studying and analyzing various financial instruments, and my practical experience extends to actively trading in these markets. I've closely followed the developments in the field, keeping abreast of new products and trading strategies. My insights are rooted in a deep understanding of market dynamics, risk management, and the intricate details of different financial instruments.
Now, let's delve into the concepts mentioned in the article on Micro Futures Trading:
-
Micro E-mini Futures Contracts:
- Launched by the CME Group on May 5, 2019.
- Available for S&P 500, Russell 2000, Dow Jones 30, and Nasdaq100 indices.
- Allow exposure to price fluctuations at a lower cost compared to regular E-mini futures.
- Contracts are 1/10 the size of their respective E-mini futures counterparts.
-
Contract Sizes and Multipliers:
- Micro E-mini S&P 500 has a value of $5 per point.
- Micro E-mini Russell 2000 and Micro E-mini Dow Jones have multipliers of $5.
- Micro E-mini Nasdaq-100 has a $2 multiplier.
- Example: If the S&P 500 Index is at 2750, the notional value of one Micro E-mini S&P 500 futures contract is $13,750.
-
Tick Increments:
- Tick increments vary, with the Micro E-mini S&P 500 quoted in a quarter of one point.
- A one-tick move in the Micro E-mini S&P 500 is worth $1.25.
-
Micro Futures Contract Sizes:
- Regular = 1, Mini = 1/2, Micro = 1/10th.
- Micro futures provide more flexibility and control while maintaining capital efficiency.
- Examples include Micro WTI Crude Oil, Micro Gold, Micro Silver, and Micro Copper futures.
-
Other Micro Futures:
- Micro Indices (Micro E-mini Nasdaq-100, Micro E-mini Russell 2000, Micro E-mini Dow).
- Micro Bitcoin with a contract size of 0.10 bitcoin.
- Micro Treasury Yields for 2-year, 5-year, 10-year, and 30-year yields.
-
Micro Forex (FX) Futures:
- Examples include Micro AUD/USD, Micro USD/CAD, Micro USD/CHF, Micro EUR/USD, Micro GBP/USD, Micro INR/USD, and Micro USD/JPY.
- Contracts are 1/10th the size of standard contracts.
-
Trading Hours and Exchanges:
- Trading hours, tick sizes, and other specifications vary for each micro futures contract.
- Examples include CME Globex, CME ClearPort, COMEX, and NYMEX.
This comprehensive range of Micro Futures Contracts allows traders to access diverse markets, manage risk effectively, and engage in more cost-efficient trading strategies across various asset classes. Whether you're interested in equity indices, commodities, cryptocurrencies, or forex, micro futures provide a more accessible entry point for market participants. Ready to get started? Sign up for a free demo account and begin your Micro Futures Trading journey today!
