What is E-MINI trading?
E-mini is a small futures contract for a standard and poor stock of 500® (S&P 500®) that investors electronically trade on the Chicago Mercantile Exchange (CME) GLOLOX platform. The CME first introduced trading in E-Mini in 1997 in response to investor complaints that the standard Futures S&P contract was too expensive for the average investor. E-mini trading has grown popularity since its inception, with an average daily traded amount of about $ 140 billion USD (USD). The E-mini contract is worth about $ 50 multiplied by the S&P 500® index. E-mini contracts can also be obtained for other indices, such as Russell 2000 and NASDAQ 100. While standard futures contract often requires a performance bond of several thousand dollars, e-mini trading requires a margin of only $ 100. In inflation markets with high volatility, margins for frying in full large -scaleThey can rise sharply, which makes it difficult if not impossible for the average trader to enter the market. E-mini provides a small investor's cheap way to join the market without making an exaggerated capital investment.
In addition to its greater affordability compared to conventional futures contracts, e-mini trading offers additional benefits for investors. Lower prices for E-MINI and global electronic markets create greater liquidity on the market by opening trading with e-mini investors around the world. The electronic trading platform trades more than 23 hours a day, five days a week. Unlike traditional Futures S&P 500® trading, which is still being carried out in an open pit, e-mini trading prevents slipping, which increases the reliability of purchase and SELL prices.
Although e-mini trading expands the investor cost-effective entry into the market index, must alsoconsider disadvantages. Mini markets allow a limited number of business orders. For example, many investors want to enter a good line (GTC) to reduce losses. GTC orders are not available on mini-optics markets, so traders have to give a daily limit or stopping orders before trading. For this reason, e-mini trading requires either active management or closing all positions overnight.
on 6. On May 2010, market markets fell. After an intensive investigation of the reasons for the accident of the United States (SEC) Securities Commission, it concluded that e-mini trading caused an accident. It seems that the large mutual fund sold 75,000 E-mini contracts in one day, which launched high-frequency merchants to sell their contracts. The combined sale of high-frequency merchants and mutual funds resulted in a three percent drop in the price of the e-mini in just four minutes. In response to Flash crash, new government regulations imposed new trade restrictions that stop trading for five Miforce, when any stock S&P 500® rises or increases more than 10 percent in five minutes.