When the price of E-Mini futures became too high for many futures traders the CME created a version that is one-tenth the size, the Micro E-Mini futures. Besides allowing for futures trading at lower costs the Micro E-Mini futures let traders have more flexibility in their trading and greater precision in risk management. Available since 2019 the Micro E-Mini futures let traders trade futures on the S&P 500, Dow Jones Industrial Average, Nasdaq 100, and Russell 2000 where each contract is equal to a tenth of what an E-Mini contract costs.
What Is a Micro E-Mini?
Before CME created the Micro E-Mini for trading the S&P 500, Dow Jones Industrial Average, Nasdaq 100, Russell 2000 and others, there was the E-Mini. The E-Mini S&P 500 trades at $50 times the value of the index. The Micro E-Mini S&P 500 trades at $5 times the value of the index.. While are more than two dozen possible E – Mini futures contracts there are only four Micro E – Minis. All of these trade for a tenth of their E-Mini cousins.
The Micro E-Mini is meant for retail traders. It has several benefits including easier diversification of a futures portfolio, efficient use of capital, access around the clock, and the ability to offset stock portfolio risk without buying or selling stocks in that portfolio. These futures let an investor take long or short positions on stock indexes for substantially less than by buying or selling those stocks. Because Micro E-Mini Futures are less expensive than the E-Mini the investor can often hedge more than one position.
Micro E Mini – S&P 500
The S&P 500 is an index of the leading 500 publicly traded companies in the USA. The index is calculated based on market capitalization and several other criteria. It is perhaps the best measure of overall US stock performance. Because it tracks the US economy to a large degree it can be traded with that fact in mind. The Micro E Mini – S&P 500 is a futures contract valued at $5 times the index. Day traders can trade futures to buy or sell these contracts in order to speculate and investors can use these futures to hedge their stock positions.
Micro E Mini – Russell 2000
The Russell 2000 index is based on the 2000 smallest capitalization companies in the Russell 3000. The Russell 3000 is an index based on the largest 3000 companies by market cap. Thus the Micro E Mini – Russell 2000 is a futures contract for middle to smaller cap companies in the USA. Like the S&P 500 it covers a broad swath of companies. However, the middle to small cap companies commonly perform differently than the top 500 companies covered by the S&P 500. The price of a Micro E Mini – Russell 2000 contract is $5 times the value of the index.
Symbol for Micro E-Mini
There is a different symbol for Micro E-Mini futures depending on the index involved. The symbol for the Micro E – Mini for the S&P 500 is MES. The Micro E – Mini for the Dow is MYM. The Micro E – Mini for the Nasdaq 100 is MNQ. And, the Micro E – Mini for the Russell 2000 is M2K. While there are a couple of dozen E- Mini futures available to trade, the only ones that trade as Micro E – Minis are the Dow, Nasdaq 100, S&P 500, and the Russell 2000.
Micro E-Mini Futures Fees
When you trade with Ninja Trader Micro E-Mini futures fees you can open your account for $400 and will only be able to begin trading with as little as a $50 margin. As with all futures trading there are exchange fees, routing fees, and clearing fees. Because Micro Mini-E futures are less expensive than Mini-E futures there fees are also less.
How to Trade Micro E-Mini Futures
When you trade Micro E-Mini futures you are trading futures on a broad section of the US stock market. You are essentially trading the S&P 500, Dow Jones Industrial Average, Nasdaq, and Russell 2000 indexes which provide excellent liquidity and volume. To be successful when trading a Micro E-Mini start by taking a professional day trading course that makes you a benchmarked professional in entering, managing, and exiting your trades.