E-mini is a futures contract that is traded electronically representing a fraction of a typical futures contract.
The emini day trading implies the agreement to purchase or sell the cash worth of the primary index at an identified date in the future.
The size of the agreements is set at a definite value multiplied to the futures price depending on the specific emini. Like, an emini S&P 500 is sized at $50 times the futures value.
Thus, if worth of the emini is $2500, the contract value would be $125,000. Any change in the value of the futures would inflict corresponding changes in the contract value.
Although the mini agreement covers a wide range of products like metals, indexes, commodities, and forex when referred in general, it directs at stock index futures, emini S&P 500 specifically.
The first emini product was introduced in Sept 1997 when CME launched emini S&P 500. Since they were traded at just one-fifth of a full-sized contract, thus more affordable, it increased the overall participation of the traders and investors.
What is the stock index? It is the statistic reflecting the compound value of a certain cluster of stocks. Like, S&P 500 would be an index that consists of 500 stocks selected for the market size, liquidity & industry grouping.
Stock index futures permit investors and traders in purchasing and selling a complete cash index without the need to purchase each individual stock, thus turning them into a more practical trading system.
Examples: Some of the popular e-mini futures contracts are E-mini NASDAQ-100, E-mini S&P 500, E-mini S&P MidCap 400, E-mini Dow, and E-mini Russell 2000.
The regular settlement values of the emini contracts are equal to the full-sized contracts, of course, depending on the contract month. Thus, the worth of five emini S&P futures contracts would hold a value equivalent to the one regular futures contract.
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