The S&P 500, which is frequently used as a benchmark for American equities, correlates to the E-mini S&P future. When the index rises, so do the E-mini S&P futures. E-mini S&P futures are traded under the symbol "ES." Instead of using their complete name, you'll frequently see them referred to as "ES." ES contracts have a month-long duration, much like the weekly expiration of stock options. The most liquid ES contracts have daily trading volumes that frequently exceed one million. They are favored by day traders because of their liquidity and the prolonged trading hours. On a given day, ES futures typically have enough volume and volatility to turn a profit. Day traders also frequently use futures for commodities like oil for the same reason.
Specifications for ES Contracts
The fundamentals of the futures market that a trader is using are the contract specifications. The following are the contract details for the ES futures market: ES Emblem:- March, June, September, and December are the expiration months.
- Chicago Mercantile Exchange (CME)
- Dollars are the currency.
- 0.25 point tick size
- $12.50 for each tick.
- Four ticks equal one point, with a contract value of $50 for each point.
- January F
- February G
- March H
- April J
- May K
- June M
- July N
- August Q
- September U
- October V
- November X
- December Z
Trading in E-Mini S&P 500 (ES) Futures
Many brokers—but not all—can be used to trade these goods. For instance, traders who have accounts with TD Ameritrade or Charles Schwab could be able to trade futures, whereas traders who have accounts with Fidelity or Robinhood cannot. Even so, you will probably need to open a unique margin for futures accounts in order to trade, even if your brokerage does provide futures trading. The best price movement and volume occur in the period before the stock market opens at 7:30 a.m., making this the optimal time for day trading. A usual increase in volume occurs during the final hour of trading, from 3 to 4 p.m., which offers better day trading opportunities than the slower times in the middle of the day. Before trading with actual money, test out an ES day trading strategy. Traders can obtain historical market data and test out trading techniques whenever they want using a variety of applications, including NinjaTrader. People with a limited amount of time or those who wish to practice in the evening when the market is quiet will find this useful. It may be advisable to stick to practice until you understand the basics, even if you can trade at busy times. Risk management is critical for ES trading success. Your strategy and your willingness to take a risk on every trade will determine how much money you start trading with. It is recommended that traders start day trading with at least $3,500. That needs to be regarded as the bare minimum, and ideally, a day trader would have closer to $7,000 on hand before opening positions. It's a good idea to have even more money on hand if you plan to swing trade ES futures, which entails holding positions open throughout the night. $10,000 might be the absolute minimum for swing traders to get started.S&P 500 E-Mini Margin
Compared to traders who hold futures positions overnight, day traders have reduced margin requirements. The amount of money a trader can borrow to open a position is known as the margin requirement (in this case, to buy an ES contract). Day traders are permitted to borrow up to four times their available capital, whereas swing traders are only permitted to borrow up to 50% of the trade's entry price. For instance, if a trader has $4,000 in cash on hand, they can purchase $8,000 worth of ES contracts if they intend to hold the position overnight. But that trader could purchase ES contracts worth $16,000 if they intend to sell the contract before the day is over. This presents greater profit and loss opportunities. The minimal standards established by the Securities and Exchange Commission are referenced in these rules. Whether the brokerage you use has chosen to impose limits that are more stringent than the federal minimum will determine the specific restrictions that apply to you. Note that the minimum equity requirement of $25,000 for pattern day traders and the maintenance requirements are not covered by these examples.Vacations on the S & P 500 (ES)
The ES futures market is typically open for trading every weeknight from Sunday night to Friday night. There are holiday exclusions, though, and they are listed on the CME Holiday Calendar. Around national holidays, there are changes to or closures of the trading hours. Every month in 2022—aside from March, August, and October—will have a national holiday. There is at least one trading day that is impacted by a holiday every other month.Questions and Answers (FAQs)
How many minutes are spent trading ES futures each week? From 6 p.m. ET on Sunday through 5 p.m. ET on Friday, a nearly 24-hour-per-day electronic trading system is used for futures trading. Each day, between 4:15 and 4:30 pm, trading is suspended. There is a maintenance window from 5 to 6 pm, Monday through Thursday. 4 When do contracts for ES futures expire? The third Friday in March, June, September, and December marks the expiration date for ES futures contracts. A trader must either roll their contract forward or settle it when certain dates come around.