What is E-Mini trading and how to do it?

Not many investors and traders are aware of the term ‘E-Mini Trading’. Emini trading is nothing but stock market future trading specifically for small time investors. Emini trading can be done in various ways through different products. These include Emini S&P 500, Emini NASDAQ 100 and E-Mini Dow Jones. Out of the above alternatives, the Emini S&P 500 product is the most popular among the traders. It is also most widely used emini trading product among the investors since S&P 500 index represents the broader industry and more companies as compared to NASDAQ and Dow Jones.

The reason emini trading is suitable for smaller investor is due to the fact that an emini trade is only one fifth the value of a regular futures contract. This makes it more accessible for an investor who does not have a lot of money to invest at a particular time. When we say smaller amount, it is only relative. For emini trading the amount will be $60,000 where it would have been $300,000 for a regular contract.

The trading for these types of futures can be done round the clock electronically. The emini trading is also popular among the day traders who do dozens of trade within a day. They look to buy at small dips and sell them even for a small profit within a day. This is a very risky strategy and not at all recommended for beginners and investors who don’t understand this market properly.

Let us take a look at different ways through which e-mini trading can be done:

E-mini S&P 500 - E-Mini S&P is often referred to the commonly used term ‘E-mini’. This product is designated by the ticker symbol ‘ES’. As mentioned earlier, the E-mini S&P 500 is very popular and has giving good returns consistently. There is enough volatility in this which enables the investors to take profit.

E-mini NASDAQ 100 – After the success of E-mini S&P 500, emini NASDAQ 100 was launched. As the name suggests, this product is based on the index of NASDAQ which is the most popular benchmark of technology, biotechnology and telecom sector in United States. This product is associated with ticker symbol of ‘NQ’.

E-mini DOW JONES – This product is based on the Dow Jones industrial average index. The ticker symbol associated with this product is ‘YM’. The e-mini Dow Jones contract is favorable for smaller investors since the margin requirements are small in this contract.

The experts and analysts strongly suggest that you do not start directly with E-mini trading. It is better to start with QQQQ trading and then move to e-mini. You can contact your local broker to get more details, check the Chicago Mercantile Exchange (CME – Globex) website or research on the internet before diving into the e-mini trading world.