Last Updated on 21 September, 2020 by Therobusttrader
Micro E-mini futures
Micro E-mini futures have 1/10th the size of the classic E-mini futures. Micro E-mini futures make it easier for traders with smaller accounts to discover the benefits of trading futures.
Micro E- mini Symbols- Contract Specifications
(Don’t know what ticks or points are? Then you may read our article on futures.)
Margin And Commission
The Commission and margin varies by broker. Below we have listed some examples of the commission that some brokers charge:
TD Ameritrade: $2.25
Interactive Brokers: $0.32-0.47, depending on trading volume
When it comes to the margin, it varies with time. The easiest way to find the margin for any of the micro futures contracts mentioned in this article is by going to the website of the exchange, choosing the futures contract of interest, and then clicking on “margin”.
Keep in mind that some brokers may require a larger amount in margin than what is set by the exchange.
How Much Capital Do I Need to Trade Micro E-mini futures?
Depending on the strategy and type of trading, you may begin with as little as $1000. Still, it’s recommended to start with a little more to have room for unexpected events.
Many of those who are new to trading begin with a small capital. Often, it might only be a couple of thousand dollars. For those traders, futures have not been an alternative. Even the e-mini futures, that were made to make futures more accessible to traders with smaller accounts, often are too large.
This is where micro e-mini futures comes to their rescue. Launched by CME in 2019, micro e-mini futures aim to cut the capital threshold and allow smaller retail traders to enter the micro e-mini futures markets.
For example, many daytrading strategies in the ES (S&P 500) contract require a stop loss of a few thousand dollars. For a trader with a capital of 2000$ dollars, it would mean that risk is high beyond any sensible limits. These traders have often had to resort to other instruments, such as exchange-traded fund, that provide lower share/contract sizes.
With the advent of these new micro e-mini futures contracts, low capitalised traders can now reap the benefits of the futures markets, such as near 24/7 markets and comparably high liquidity both during the night and day sessions.
Benefits of Micro futures
- With e-micro futures, you will be able to participate both in the night and day session. Did you forget to sell at close? No problem! Just wait for the market to reopen half an hour or so later!
- The current e-mini contracts have high volatility, which helps to reduce slippage. The Micro- Emini contracts will most likely soon develop to trade at as high, or even higher volumes!
- Micro futures don’t require as much capital as traditional futures contracts which makes them more available to traders with little capital.
Some of the major disadvantages have been that futures markets require much capital. That main drawback is now erased!
Trading Strategies for Micro E-mini Futures
Typically, trading strategies that work on the full-size contracts should also work with the e-mini micro contracts. Our edge library is a good start to find promising edges to trade on the micro futures markets!
Previously, as with the DAX futures contract, which is massive, there are sometimes some issues with converting strategies from the full-size contract. Hopefully, this will not at all be an issue with the new micro e-mini contracts.
The advent of e-micro futures contracts is welcomed by many traders who previously have been excluded from the e-mini index futures markets due to the high capital requirements. Hopefully, micro e-mini futures will help to popularize futures and bring a good concept to the larger masses.