Indices Market

Equity Index 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.

Popular Contracts

E-mini S&P 500 - The Standard & Poor's 500 is an index of 500 of the top stocks, which are chosen to adequately show the risk/return characteristics of large market capitalization companies. The stocks are chosen by the S&P Index Committee which consists of Standard & Poor's analysts and economists. Used to take the temperature of the U.S. stock market and to build financial portfolios, the S&P 500 is constantly monitored and traded. This is the most actively traded stock index futures contract.

E-mini NASDAQ 100 - Created in 1999 this futures contract is one-fifth the size of the NASDAQ-100 Index future. The NASDAQ-100 Index consists of the 100 largest non-financial securities on the Nasdaq Stock Market, domestic and international. The index uses a proprietary algorithm to review its components quarterly and readjusts to meet predetermined criteria. Its holdings include telecommunications, biotechnology, retail/wholesale trade, and computer hardware and software.

E-mini DOW - Started in 2002, this contract trades only electronically on CME Globex. It is one-fifth the size of the Dow Jones Industrial Average, which is an index of 30 U.S. price-weighted, blue-chip companies. Its sectors include technology, entertainment, retail, consumer goods, and financial services. This contract is an easy start for beginners because each tick is only a five dollar price change.

Reports to Watch

Resources

 

Fundamental Reports

Recent Indices Futurescast

{{article.articleLinkTitle}}
By: {{article.author}}
{{article.articlePostDate.slice(0,20)}}

All Indices Futurescast

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.