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Todd Mitchell – Learning How to Successfully Trade the E-mini & S&P 500 Markets

Todd Mitchell – Learning How to Successfully Trade the E-mini & S&P 500 Markets

E-Mini The S&P stock market index futures contract is listed under the commodities ticker symbol ES and is traded on the Globex electronic trading platform of the Chicago Mercantile Exchange, despite the fact that there are several other E-mini contracts. One contract has a notional value 50 times greater than the S&P 500 stock index. The S&P 500 cash index ended at 1,978.09 on September 15, 2015, making each E-mini contract a wager of $98,900.

On September 9, 1997, the CME launched it as a result of the old S&P contract’s value (which at the time was 500 times the index, or about $500,000), which had grown to be too high for many small dealers. The E-Mini soon rose to the top of the global equity index futures market. Following a 2:1 split, the original (“large”) S&P contract was increased to 250 times the index. Since the older (“big”) contract still employs the open outcry pit trading process, which has inherent delays, as opposed to the all-electronic Globex system for the E-mini, hedge funds frequently favor trading the E-Mini over the large S&P. The E-average mini’s daily implied volume currently exceeds $100 billion, greatly outpacing the total dollar value of trading for the underlying 500 companies. [1] [2] [3]

After this product was successful, the exchange developed the E-mini NASDAQ-100 contract, which was priced at one-fifth of the original NASDAQ-100 index-based contract, as well as several additional “mini” products targeted largely at tiny speculators rather than huge hedgers.

In June 2005, the exchange unveiled a still-smaller product based on the S&P, with 100 shares of the wildly successful SPDR exchange-traded fund serving as the underlying asset. The performance bond (or “margin”) necessary for one such contract, however, is almost as expensive as that for the five times bigger E-Mini contract due to the many regulatory requirements. The product was never widely used; daily volumes seldom exceeded 10 contracts.

The trading hours for the E-Mini contract are from Sunday through Friday from 5:00 pm to 4:00 pm (Chicago Time/CT), with a 15 minute break between 3:15 pm and 3:30 pm CT. There is a daily maintenance time from 4:00 to 5:00.

What is Technical Analysis?

Technical analysis is a means of examining and predicting price movements in the financial markets, by using historical price charts and market statistics. It is based on the idea that if a trader can identify previous market patterns, they can form a fairly accurate prediction of future price trajectories.

It is one of the two major schools of market analysis, the other being fundamental analysis. Whereas fundamental analysis focuses on an asset’s ‘true value’, with the meaning of external factors and intrinsic value both considered, technical analysis is based purely on the price charts of an asset. It is solely the identification of patterns on a chart that is used to predict future movements.

Salepage : Todd Mitchell – Learning How to Successfully Trade the E-mini & S&P 500 Markets

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