E-minis are future contracts that are promissory notes to sell or buy a stock at a specified date for cash value. The following guide will help you learn a little more about e-minis so that you can start your trading journey with a little knowledge.
Types of E-Mini Contracts
The first thing you should know is that there are many types of e-mini contracts available to you, meaning there are several e-minis that may suit your specific needs. The following are some of the most popular types of contracts that you should know about:
- E-minis S&P 500 or ES: This is a future contract with an index of about 500 stocks.
- E-minis NASDAQ-100 or NQ: You will be exposed to a 100 stocks of non-financial US large-cap companies.
- E-minis Dow or YM: An e-mini with around 30 stocks of the most successful stocks available on the market.
- E-minis S&P MidCap 400 or EMD: This an e-mini that allows you to have access to 400 companies that are somewhat leveled or mid-leveled, which are quite safe.
- E-minis Russell 2000 or TF: The TF e-mini contains 2000 of some of the smaller types of companies available to you.
A Few Things to Look For
The following are a few things that you should consider as an e-mini trader:
The first thing you should know about your e-mini is how often it is traded within one day, which is called its volume. Good volume means that you should be safe with the e-mini, and you may minimize risk.
The next thing you should know about is the e-mini's liquidity, which means that you need to know the following:
The width refers to just how well the e-mini is bidding, and the depth refers to the amount of orders that are resting upon your particular e-mini. Immediacy refers to how quickly the order can be executed within the market, and the e-mini's resiliency deals with an estimate of how long the market might take to bounce back after a large order is filled.
There is a lot more to learn about e-minis that you should learn about, but some of that can be learned as you begin trading. For more information, contact an expert on financial trading in your area.