Why Trade S&P Emini Futures?
Traders and investors from every corner of the globe consider the Standard & Poor’s 500 (S&P 500) as an ideal way of engaging the broader U.S. equities market. In response to the public interest, the Chicago Mercantile Exchange (CME) offers S&P Emini futures to individuals wanting to take their shot at one of the premier equities products in the world.
Five Reasons You Should Be Trading S&P Emini Futures
Alongside the Dow Jones Industrial Average (DJIA) and NASDAQ, the S&P 500 is a preferred destination for traders and investors alike. First published in 1957, it’s a weighted index based on the stock price of 500 large-cap companies listed on U.S. exchanges. The S&P 500 includes components from 75% of the aggregate U.S. equities market, earning it a reputation as being a “total market proxy.”
The S&P Emini futures (ES) contract listed on the CME captures the spirit of the S&P 500’s large-cap stability while providing traders with several advantages over traditional stock trading. Here are five of the biggest benefits — each a great reason to become involved in this exciting market.
If you’re searching for ways to boost your trade-related efficiency, then look no further than S&P Emini futures. Daily traded volumes regularly exceed 1 million on the front-month contract, ensuring maximum liquidity and a robust depth-of-market. As a result, adverse factors such as slippage are minimized, and efficient trade is promoted.
For many active traders, the availability of leverage is a critical aspect of conducting day-to-day business. Emini S&P 500 futures provide purchasing (or shorting) power on a much larger scale than in traditional stocks. With intraday margin requirements as low as $500 per contract, the Emini S&P 500 offers participants the opportunity to take sizeable positions with only a fraction of the capital required by equities products.
#3 Low Barriers to Entry
The contemporary digital marketplace has given retail traders from all walks of life an ability to participate in the world’s most popular markets. Modest margin requirements, reduced commissions/fees, and remote exchange connectivity are a few reasons why legions of professional traders turn to futures instead of engaging indices or stocks directly. If you have a bit of risk capital, computing power, and an internet connection, then the odds are very good that you will be able to trade S&P Emini futures.
In contrast to stocks, futures afford the trader superior strategic flexibility. You can profit from being either long or short the market, as well as buying or selling contracts frequently. Naked shorting or high volume strategies are typically off-the-table in conventional equities trading unless you’re well-capitalized and privy to unique brokerage service.
Futures products are priced with respect to what an asset’s value is perceived to be at an upcoming point in time. Accordingly, prices regularly exhibit sensitivity to vast array of factors. Breaking news items, economic events, and contract expiration are all capable of influencing the process of price discovery and heightening periodic volatilities.
The public nature of the S&P 500 ensures consistently high levels of participation and, in turn, enhanced volatility. Subsequently, traders are able to capitalize on significant swings in Emini S&P 500 pricing on a near-daily basis.
Getting Started with the Emini S&P 500
For more than 50 years, the S&P 500 has been a staple of American finance. It’s viewed as being a benchmark of U.S. stock market value, as well as a ripe target for active traders.
If you’re interested in engaging the S&P 500 via S&P Emini futures, check out the service suite available at Daniels Trading. Featuring a broad spectrum of trading options, Daniels Trading has everything you need to tackle the futures markets in a broker-assisted or self-directed capacity.
Contact Daniels Trading
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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.