EMini Trading

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What does E-Mini trading mean and how is it done?

Most investors are only interested in trading stocks and are not very inclined towards futures trading die to the amount of risk involved. That is the reason; the term E-mini trading is not so common. E-mini trading is nothing but trading of stock market future contracts. These types of contracts are very suitable for smaller investors who are not in a position to invest a huge amount of money at a given time.

E-mini trading can be doe through various products including Emini S&P 500, Emini NASDAQ 100 and E-Mini Dow Jones. From the above list, the E-mini S&P 500 contract is the most popular among the traders. This type of contract is famous because S&P 500 represents the broader index and contains more companies as compared to NASDAQ or Dow Jones.

E-mini trading is suitable for smaller investors because the investor needs only one fifth value of a regular contract to do the trade. This is great for an investor who cannot afford to invest so much money at a given moment of time. Even then these contracts are not cheap. For an emini contract the value would be $60,000 where it would have been $300,000 for a regular contract.

E-mini trading is very popular among day traders since it can be done round the clock through the internet. You can do it anywhere in the world if you have a good internet connection. The day traders usually trade many times a day in the hope of buying at dips and selling at price rise in an effort to make profit. But, this is a risky strategy and should not be used by inexperienced traders.

There are 3 main types of contracts which are traded in E-mini trading. These are given below.

E-mini S&P 500 - E-Mini S&P is generally termed as emini contracts for the purpose of trading. This is because these contracts are most popular and very famous among the traders. This product is designated by the ticker symbol 'ES'. These contracts have been consistently giving good returns to the traders.

E-mini NASDAQ 100 - This product was launched after success of E-mini S&P 500 and it is based on the NASDAQ index. The ticker symbol for this futures contract is 'NQ'. NASDAQ is a key benchmark of technology, telecom and biotechnology sector.

E-mini DOW JONES - This product has the ticker symbol of 'YM' and it was launched based on the Dow Jones Industrial average. This is popular among smaller investors since the requirements of margin calls are small in this contract.

The traders can contact their local brokers to get more information about E-mini trading before starting to trade in this market. They can also check Chicago Mercantile Exchange (CME - Globex) website or research on the internet before diving into the e-mini trading world.