Get More Bang for Your Buck With E-Minis
Conventional buy-and-hold stock investing is not working in today’s market. Trading E-Minis is a great alternative, because you can take full advantage of the market’s volatility.
You can easily make money in a market that is going up or down. You can, for example, make a bundle if you go “long” or buy an E-Mini contract and the market goes up. And if you go “short” or sell an E-Mini contract, you can just as easily make money when the market goes down. This adds an entirely new dimension of opportunity for investors.
An E-Mini is an electronically traded futures contract on the Chicago Mercantile Exchange (CME) that represents a smaller version of a standard futures contract. E-Mini contracts are available on the S&P 500, Nasdaq 100, S&P MidCap 400, and Russell 2000 indices. One example: The E-Mini S&P 500 futures contract is one-fifth the size of the standard S&P 500 futures contract.
E-Minis have a low margin requirement, which makes trading them easy and affordable. You can get started for as little as $500 per contract. And because standard stock and index options currently have high premiums due to market volatility, your leverage and profit potential is higher with E-Minis.
E-Minis allow investors with small amounts of risk capital to participate in the Dow and S&P 500 at a fraction of the cost of purchasing the actual stocks outright. You would have to pay thousands of dollars in commissions alone to buy all the stocks in the S&P 500, for example. But by buying an E-Mini S&P 500 futures contract, you can participate in all those stocks for a commission of less than $10!
Bottom line: Start trading E-Minis if you’re looking for an exciting, highly versatile, efficient, and economical way to capitalize on the daily swings in the stock market.
[Ed. Note: Ted Peroulakis is a writer and analyst with Investor's Daily Edge (IDE), ETR's sister publication. Find out more today.
The best way to learn the ins and outs of trading (and making huge gains with) E-Minis is with the Velocity Strategy, developed by IDE editor Rick Pendergraft. Using this simple strategy, he was able to make 99.15 percent gains in 2008. Learn more here.]
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