Enter the Realm of Emini Futures
Investors with limited amounts of investment capital have the chance to get into the coveted futures market with inexpensive emini futures. With online trading becoming significantly popular, emini futures have also grown to be a powerhouse among the trading community.
Today, individual investors make up a substantial part of the futures market, thanks in part to inexpensive futures contracts.
What is So Special About Emini Futures?
The word emini futures is a combination of the words electronic, miniature and futures. Putting all the terms together, you get a product very much like normal futures, albeit much smaller in size, that are traded electronically through an online broker. They are traded proportionally to futures, with an emini contract costing only a portion of the size of a full scale contract. Emini futures are worth $50 per point change in the index being traded.
For example, a change from $800 to $801 on the S&P 500 would be worth $50 in an emini contract. An emini futures trader need only put up $800 to buy the contract mentioned above, allowing for excellent returns on investment.
Figuring Your Earnings in Emini Futures
Because a $1 change in the price of an index is worth $50, calculating your profits on emini futures contracts can appear difficult when first starting. Usually, accounts denominate your position by .25 points, so with each .25 point change in an index, your account balance rises or falls by $12.50 per contract. Thus, an investor with two S&P500 contracts worth $1600 total would earn $25 for each .25 point change. Just like with stocks, investors can both short and long futures contracts and make money in bull and bear climates.
Why Trade Emini Futures?
Emini futures didn't become an investor favorite by being a poor investment to trade. Emini futures grant investors the chance to start trading with as little as $2000. You can trade with the big boys regardless of your understanding of the market. Also, since emini futures are leveraged, they create better earnings potential than standard futures accounts. Even experienced professionals tend to trade eminis over full futures lots because of the ability to leverage and earn greater profits when the market moves in your direction. In addition, unlike other speculative investments such as penny stocks, emini futures contracts are almost as liquid as cash. Since there are so many people buying and selling throughout the day, it is possible to buy one minute and sell the next.
Trade Whenever You Desire
One of the best benefits to moving to emini futures is that the market is open 24 hours per day. Unlike the stock market which has the same open and close each day, futures trade around the clock, pricing in everything that happens while the stock markets are sleeping.
Stock traders rely on late night and early morning futures prices to give them an idea of the general direction of the next day, since stocks are closed to trading while many important events take place. One often overlooked benefit, too, is that you can trade whenever you want. If you're just getting started, you can start trading before or after you go to your 9-5. Are you a night owl? You'll be able to trade indices and commodities while your local markets are sleeping!
Article Source: FxTradingStock.com
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About the Author: Learn about how you can profit from trading emini futures through free indicator resources
by: Barry Taylor
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Word Count: 561
Date: Wed, 12 May 2010
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