E-Mini Trading: An Easy-To-Understand Guide For Beginners

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Do your kids understand the value of money? Do they know that it takes hard work to earn the money you use to keep a roof over their heads and put food on the table? One thing I wanted to be sure my kids understood was that money isn't easy to come by. If you want something, you will have to work for it. So, what are the best ways to teach your kids the true value of a dollar? My blog is all about teaching kids of all ages about hard work and how it pays off. Hopefully, you will find everything here useful and can help your child learn that with a little hard work, anything is possible.

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E-Mini Trading: An Easy-To-Understand Guide For Beginners

23 October 2015
 Categories: Finance & Money, Blog

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.

You can talk to your trading consultant for more information regarding these types of e-minis or any other that are available to you; he or she should help you find the best e-minis. 

A Few Things to Look For

The following are a few things that you should consider as an e-mini trader:

Volume

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.

Liquidity

The next thing you should know about is the e-mini's liquidity, which means that you need to know the following:

  • Width
  • Depth
  • Immediacy
  • Resiliency

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.