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How To Trade EMINI SP 500 Index Futures



S&P 500 Direction Starts Chart

Trading Standard and Poors E-mini SP S&P 500 Index Futures, Direction Starts Chart

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. TRADING FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND IS NOT SUITABLE FOR ALL INVESTORS.

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Philosophy is to identify the cause and characteristics of direction. Proprietary criteria, definitions and logic are given to a computer which deciphers price, time and volume data, calculates Direction Starts and four types of activity. The four types of activity are categorized and encoded as:

Upward Buying = Buying,
Downward Selling = Selling,
High Selling = HS
Low Buying = LB

  • White vertical line identifies the new day.
  • Green line/price highlights the start of a potential segment (trend).
  • Blue line/price is for tolerance and getting out.
  • Basic Segment Sequence: 1) a Start, 2) market continues direction or not, 3) go flat.
  • Up trends are caused by, and feature Buying that dominates selling. Not all Up starts continue.
  • Down trends are caused by, and feature Selling that dominates buyng. Not all Down starts continue.
  • Volume information is sent from the exchanges and is a numerical count.
  • Pacific time and date of the new day are below.

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Trading is not easy and timing is a factor.

Some people have busy schedules, projects to work on and simply don't have time to study and monitor markets. Some people don't have a computer connected to receive, and programmed to analyze streaming data from the exchanges. Furthermore, some people might not have the specific market experience or haven't researched in depth the combination of market understanding, market logic and programming. With demands for your time, attention and perhaps attendance, how can you be precise at getting in, when new trends in markets start?

Without all three Ts: Time + Tools + Training, what kind of market timing will one have?

Click here for a complimentary trial of Direction Starts chart service.




Advantages of Trading Mini S&P 500 Futures and Options

Trading Mini S&P 500 futures and options offers investors distinct advantages:

  • Exposure -- Investors can have exposure to the U.S. stock market via the world's leading stock index. Although there are many indexes, some very popular, the S&P 500 has the most closely watched, actively traded and liquid of all futures products based on a stock index.

  • Opportunity -- These contracts provide a variety of investment opportunities, such as: increasing or hedging portfolio exposure; spreading against other CME Group index products such as the NASDAQ 100, or S&P MidCap 400; a cost-efficient way to benefit from rising or falling equity markets.

  • What Are Mini S&P 500 Futures?

    Mini S&P 500 futures are legally binding agreements to buy or sell the cash value of the S&P 500 Index at a specific future date. The contracts are valued at $50 x the futures price. For example, if the Mini S&P 500 futures price is at 920.00, the value of the contract is $46,000 ($50 x 920.00).

    The minimum price movement of the futures or options contracts is called a "tick." The tick value is .25 index points, or $12.50 per contract. This means that if the futures contract moves the minimum price increment (one tick), say, from 920.00 to 920.25, a long (buying) position would be credited $12.50; a short (selling) position would be debited $12.50. All futures positions (and all short option positions) require posting of a performance bond (or margin). Positions are marked-to-the-market daily. Additional deposits into the margin account may be required beyond the initial amount if your position moves against you.

    Mini S&P 500 contracts are cash settled, just like the standard S&P 500; there is no delivery of the individual stocks. Even better, Mini S&P 500 daily settlements and quarterly expirations will use the exact same price as the S&P 500. The same daily settlement prices allow Mini contracts to benefit from the liquidity of the S&P 500 futures.

    Like the S&P 500, which is settled using a Special Opening Quotation (SOQ), all Mini S&P 500 positions are settled in cash to the same Special Opening Quotation on the third Friday of the quarterly contract month. What is the Special Opening Quotation, or SOQ, as it is often called? The final settlement price is an SOQ of the S&P 500 Index based on the opening prices of the component stocks in the Index, or on the last sale price of a stock that does not open for trading on the regularly scheduled day of final settlement.


    Trading the Mini S&P 500 - An Example

    Let's say you are an individual investor who is bullish on the stock market. You have been following daily activity in financial newspapers and on financial news stations. You want to become involved in the stock market; however, you have only around $10,000 to invest. You see every day in the newspaper that the market, as tracked by the S&P 500, is moving, and you want to be a part of it. You have traded stocks before, but you've decided that being a stock picker is too difficult and time consuming. You also realize that you would have to limit your investment to just one or two individual stocks. Or, you could buy a mutual fund; however, that only allows you to value your assets based on the closing price each day, thus losing the trading opportunity within the day.

    You might instead consider going long Mini S&P 500 futures contracts to profit from your bullish outlook. Up to this point, S&P 500 futures have been out of your reach, with the minimum requirement to put up far exceeding your total planned investment. Here's your opportunity. Mini S&P 500 contracts allow you to put your investment dollars to work by purchasing Mini S&P 500 futures. Now you can participate in the leading stock index futures market at a fraction of the cost.


    Mini S&P 500 -- The E-Mini
    Futures & Options Contract Highlights

    Mini S&P 500 FuturesMini S&P 500 Options on Futures
    Ticker SymbolESCalls: ES
    Puts: ES
    Contract Size$50 x IndexOne Mini S&P 500 futures Contract
    Tick Size.25 index points
    ($12.50 per contract)
    .25 index points
    ($12.50 per contract)
    Trading Hours24-hour trading, except
    3:15 p.m. - 3:30 p.m. (Chicago Time) Monday - Thursday
    3:15 p.m. Friday - 5:00 p.m. Sunday
    Contract MonthsMarch, June, September, DecemberAll 12 Calendar months (The underlying instrument for the three monthly option expirations within a quarter is the quarter-end futures contract.)
    Last Day of TradingTrading can occur up to 8:30 a.m. (Chicago Time) on the third Friday of the contract monthMarch, June, September, December:
    Same date as underlying futures contract
    Other eight months:
    The third friday of the contract month
    Strike IntervalsNot Applicable5-point intervals for two nearest contracts, 10-point intervals for deferred months
    Quarterly Futures & Options Settlement Procedures:
    Cash settlement. All open positions at the close of the final trading day are settled in cash to the Special Opening Quotation on Friday morning of the S&P 500 Index.
    Contract specifications subject to change without notice.





    S&P 500 Index Futures and Options

    Emini S&P 500 Index Futures and Options





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    How To Trade EMINI SP 500 Index Futures

    Standard and Poors S&P 500 Index Flash Crash May 6th, 2010

    www.USAFutures.com

    Member of National Futures Association
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    10260 SW Greenburg Road
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    Call toll-free (800) 994-3810

    PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
    TRADING FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND IS NOT SUITABLE FOR ALL INVESTORS.

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