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E-Minis: The Perfect Vehicle During Market Volatility

Volatility can arise suddenly, destroying winning trades and shaking the markets to their core. Successfully navigating turbulent financial waters can be an epic challenge ― finding the ideal instrument to trade is a key part of excelling when the road becomes rocky. 

During times of chaotic price action, the best trading vehicles are those that limit risk while preserving opportunity. The E-mini lineup of products offered by the Chicago Mercantile Exchange (CME) and participating futures brokers do just that, giving traders a means to deal with the unexpected.

Putting Volatility in Check With the E-minis

If you’re already in the market or looking to become involved, then the E-minis may be your avenue to prosperity during volatile periods. Listed primarily on the CME, E-mini futures are an electronically traded collection of products that offer diversity, flexibility, and limited risk exposure to active traders.

Diversity

No matter if you’re an equities, currencies, metals, or energies trader, the E-minis are suitable instruments that are both liquid and active. Here is a brief look at the CME’s popular catalogue of E-mini futures:

Product Symbol Asset Class
E-mini S&P 500 ES Equities Index
E-mini NASDAQ 100 NQ Equities Index
E-mini DOW YM Equities Index
E-mini Russell 2000 RT Equities Index
E-mini WTI Crude Oil QM Energies
E-mini Natural Gas QG Energies
E-mini Gold GC Metals
E-mini Copper QC Metals
E-mini Euro FX E7 Currencies
E-mini Japanese Yen J7 Currencies

These products are routinely available to clients across the gamut of futures brokers, from full-service to self-directed outlets.

Flexibility

One of the strongest benefits of E-minis is the flexibility they offer traders. Many types of strategies are feasible, from short-term scalping to multi-session swing trading. No matter the type of trader you are, the E-minis can fit into your plan for capitalizing on market volatility.

Conventional wisdom tells us that increased pricing volatility equals enhanced risk. The beauty of the E-minis is that wild price action may be readily tamed in any number of ways. Here are two of the most powerful:

  • Safe-haven exposure: As many futures brokers will tell you, acquiring safe-haven assets is one way to avoid a financial catastrophe during times of extreme uncertainty. For example, E-mini gold offers traders the ability to go long on bullion via a cost-effective and financially settled investment vehicle.
  • Active shorting: When the markets take a turn south, E-mini futures give opportunistic traders a chance to profit from selling high and buying low. In the event Wall Street hits the panic button, actively shorting the Dow Jones Industrial Average, NASDAQ, and S&P 500 may be easily accomplished.

Helter-skelter markets can make even the most seasoned investor shiver. Through the flexibility of E-mini futures, you don’t just have to weather the storm ― you can prosper.

Find out how you can use futures to potentially benefit from movements in the stock market!  Sign up for the Inside Emini Equity Futures webinar series >>

Reduced Capital Exposure

The calling card of heightened volatility is wild, unpredictable fluctuations in asset pricing. Due to this primary characteristic, trading in such times is best accomplished by implementing limited leverage.

E-mini futures give traders the ability to engage the markets without assuming extraordinary financial commitments. Conversely, investing in traditional stocks and mutual funds frequently becomes capital intense endeavors. With the 50% margin requirements outlined by Regulation T of the Federal Reserve Board, open positions in stocks are often heavily vested. 

On the other hand, E-mini equity products facing the DJIA, S&P 500, and NASDAQ give traders the ability to capitalize on the vastly reduced margin requirements offered by most futures brokers. This is important because you can put a smaller amount of money, rather than your entire portfolio, in harm’s way in an attempt to realize gains.

Make Sure Your Futures Brokers Offer the E-minis!

The E-minis are powerful products that open the door to a wide variety of asset classes. Reduced margins and a diversity of offerings promote flexibility seldom found in a single security. If you’re going to trade during times of market volatility, then the E-minis are definitely worth a look.

Micro E-Mini Comparison Guide

Contact Daniels Trading

To open an account or request more information, contact us at (800) 800-3840 or info@danielstrading.com and mention .

Risk Disclosure

This material is conveyed as a solicitation for entering into a derivatives transaction.

This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.

Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.

You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the “risk disclosure” webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.

About Daniels Trading

Daniels Trading is an independent futures brokerage firm located in the heart of Chicago’s financial district. Established by renowned commodity trader Andy Daniels in 1995, Daniels Trading is built on a culture of trust committed to the firm’s mission of Independence, Objectivity and Reliability.

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