What if it was possible to pick up the change in the Market? Let’s take a look at the E-Mini Futures Market. Did you ever get excited when you found a penny on the sidewalk? And what a big deal was if it was a nickel, dime, or quarter you picked up.
It is the mini-me (Reference from Austin Powers movies) of standard futures trading.
First, we need to make sure you know what an E-mini is. An E-Mini futures contract is a smaller portion of a standard futures contract. There are several e-mini products that we can trade. Let’s start with the Indexes like the Dow, the Nasdaq and the S&P 500.
The E-mini for the S&P 500 Index is the ES. For every $1 move in the $SPX (S&P 500) Index, the ES moves $50 per contract. Have you watched the S&P 500 Index lately? The S&P 500 moves between $13 and $16 a day over a 30 day period at the time of this post. You do the math.
The E-Mini for the Dow Index is the YM. For every $1 move in the $DJIA (Dow) Index, the YM moves $5 per contract. The $DJIA averages $35- + per day over a 30 day period at the time of this post. Again, do the math.
The E-Mini for the Nasdaq Index is the NQ. For every $1 move in the $Compq (Nasdaq) Index, the NQ moves $20 per contract. The $Compq averages $20-$40 per day over a 30 day period at the time of this post. I think you are starting to get the picture.
Most moves on the futures market happen around economic reports and news, both global and domestic news.
Many of these reports in the US come out at 8:30 – 10 am. The futures market is very active around these reports; before the report on expectation of results, during the report as the market absorbs the news and after the report when the market settles down to the actual results and what they mean for the economy. There are different times of the day when the futures market is more active.
Due to the trading hours for the futures market and the margin requirement increase between 5:00-6:00pm ET, most traders prefer to day trade or scalp the E-mini futures. Since many of us still have a job or other obligations in our lives, trading portions of the day and picking up change is a wonderful opportunity.
Trading the futures or rather the e-Mini futures can be an addition to your current stock and options trading plan as well.
As a kid, my allowance doubled each week just from picking up change.