Day Trading

I was asked to speak for about a 20 minute stint at a local investing club the other night and it was an enlightening experience. The group concentrated primarily on swing trading emini contracts.

I started the my presentation out with the question, “How many people know what an emini contract is?”

The silence in the room, much to my surprise, was deafening. These men and women were adept at trading emini futures contracts but seemed to be a little fuzzy on just exactly what they were trading. On, they know it was an index, but were fuzzy on the mechanics of the contract or it’s history. I suspect they are not the only ones who were in this boat.

The emini contract, as we know it, comes in a number of flavors, and I am going to be writing today primarily about the ES, or S and P 500 contract.

First a definition from the CME itself:

“E-mini Definition: A futures contract that can be traded electronically on the Chicago Mercantile Exchange and is based on the S&P 500 index. As opposed to normal S&P futures contracts, which have a point value of $250, the e-mini contract has a point value of $50. Short for Electronic Mini S&P 500.”

So, the S and P Emini Contract (ES) is essentially the same contract as the regular S an P futures contract except it is essentially one fifth the size. Each point/contract is worth 50 dollars as oppose to $250 dollars for the big contract. Why did the CME invent the emini? So small traders could participate and trade in the futures market without the massive financial commitment it takes to trade the regular S and P future contract. Note: The emini has been a tremendous boon to the CME as the ES emini trades in excess of one million shares during a normal trading session.

The ES contract, along with all the other emini’s, are traded electronically, and small investors generally access their accounts through a normal PC. This ease of access has brought trading to the homes of millions of futures traders who can trade at their leisure

While the ES contract trades 23+ hours a day, most of the real action occurs during the actual trading sessions hours on the Chicago Mercantile Exchange, from 8:30 am to 3:15pm, and the volume and price action slows considerably once the exchange closes. There can be some active times during the overnight session, though, but their regularity is difficult to predict accurately.

A great resource for more information about emini contract can be found on the CME website as they offer several helpful brochures for download, and I encourage traders to familiarize themselves with this valuable information.

I write mainly about financial topics, specifically daytrading the ES and YM emini contract, and many of my more advanced techniques can be found at my blog, The Fractal Futures Trader.

I also write an ongoing commentary, which is a bit more opinionated, at The Fractal Traders Commentary

I encourage all to read the blogs and learn how to trade, as you can add $500-1000 dollars a day to your pocket book. Best of trading to all.

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