Equity Futures

Introduced in 1982, equity index futures and options on equity index futures have become increasingly popular. Commonly used by institutional investors and speculators, these contracts allow traders to buy and sell the futures of a basket of stocks. These equity indices are commonly used to show the health of the stock market, which can have an effect on all commodities. Because of this, traders tend to keep an eye on these markets even when they are not trading them specifically.

Due to increased interest in these markets, in 1997 the Chicago Mercantile Exchange (CME) developed the “E-mini” stock index futures contracts. The “E” is indicative of the fact that the contracts can be electronically traded, though they can still be traded on the floor. “Mini” represents that the contract has a smaller multiplier than the original stock index future. It is common for the mini-contract to be one-fifth the size, but this is not always the case. Mini contracts are consider a more retail product as opposed to the institutional investor’s favored larger contracts. In May 2019, CME Group introduced Micro E-mini futures, which feature multipliers 1/10 the size of their E-mini counterparts.

Popular E-Mini Equity Index Futures

E-mini S&P 500 Index Futures

The E-mini S&P 500 is a futures contract based on the S&P 500 index, which includes 500 top stocks chosen to represent large market capitalization companies. Selected by the S&P Index Committee, this contract is used to gauge the U.S. stock market’s performance and build financial portfolios. It is one of the most actively traded stock index futures contracts, offering accessibility to a broader range of investors.

E-mini Nasdaq-100 Index Futures

The E-mini Nasdaq, created in 1999, is a futures contract one-fifth the size of the NASDAQ-100 Index future. The NASDAQ-100 Index includes the 100 largest non-financial securities on the Nasdaq Stock Market, both domestic and international. It uses a proprietary algorithm to review and adjust its components quarterly, covering sectors like telecommunications, biotechnology, retail/wholesale trade, and computer hardware and software.

E-mini Russell 2000 Index Futures

The E-mini Russell 2000 futures track the performance of the Russell 2000 Index, which includes 2,000 small-cap U.S. stocks. These futures are essential for investors aiming to hedge or speculate on small-cap companies, reflecting broader economic trends and providing insights into the health of the smaller business sector in the U.S. economy.

E-mini Dow Jones Index Futures

The E-mini Dow Jones, launched in 2002, trades exclusively on CME Globex. It is one-fifth the size of the Dow Jones Industrial Average, which includes 30 U.S. price-weighted, blue-chip companies across sectors like technology, entertainment, retail, consumer goods, and financial services. This contract is beginner-friendly, with each tick representing a five-dollar price change.