Understanding E-mini
Trading can be a complex world, full of jargon and special terms. One such term you might come across is E-mini. This refers to a type of futures contract that is traded on electronic platforms, hence the prefix "E-", for electronic. The term “mini” denotes that these contracts are smaller than regular futures contracts.
Origin of E-mini
The E-mini came into existence in September 1997. The Chicago Mercantile Exchange (CME) introduced them to attract small traders. Before this, futures trading was often too expensive for individual traders, with the standard contracts being too large. E-mini contracts provided a more accessible entry point into futures markets.
Different Types of E-mini contracts
Various types of E-mini contracts exist, covering a range of different asset classes. E-mini S&P 500 is one of the most popular types, but traders can also access E-mini contracts for other assets, like Nasdaq 100, Russell 2000, and commodities like gold and crude oil.
Why Trade E-mini?
There are several reasons why traders might choose to trade E-mini contracts. One of the key advantages is the lower margins required for trade, making it more affordable for individual traders. Traders might also appreciate the fact that E-minis are traded virtually 24 hours a day, providing lots of flexibility. Also, as E-minis are traded electronically, they have higher transparency and easier accessibility.
Is E-mini Trading for you?
As with any form of trading, it's important to fully understand the risks and advantages before getting involved with E-mini trading. These contracts can provide a way into futures trading without the need for such a large initial outlay, but they still carry potential risks. Therefore, it's vital for traders to carry out thorough research and consider getting advice from trading professionals before diving into the E-mini market.
