Doing stock trading is quite expensive for the traders. A good alternative for them is e-mini trading that requires less investment comparatively. You won’t require a fortune pitching into e-mini trading and this is the major reason so many traders are testing their luck in it.
For those who don't know, e-mini futures are like miniature versions of futures contracts traded by large organizations as well as individuals and in some cases hedge funds. They are based primarily on major market averages and indexes that are widely tracked, commented on and followed by traders from all over the world. They offer great opportunities for everyone to engage in the futures markets since they require a small margin to begin with. Regular full sized contracts require high margins which regular traders can’t possibly afford and E-minis provide the opportunity to participate in the futures markets. Mini sized version of the same contracts can be traded for fractions of the margin of the larger contracts. The margin for a full sized contract can be as high as $20,000 while that for an e-min can range between $3,000 and $5,000 depending on your brokerage firm.
Low margins alone are hardly the reason why more and more traders have turned to dealing with e-mini futures. There are many more great reasons why you should go with e-minis as your trading vehicle. If you are too scared to deal in stocks because of the time and amount of effort it would take or you are tired of ogling option chains, take a look at more reasons why e-mini index futures make a more favorable venture. First, it is the low margin rates offered to traders who close and open their positions over the close of a single session. With these low rates you can make even more money from trading in e-minis than you would do trading stocks.
with e-minis provides a great alternative to stock trading which can be very expensive to traders in terms of the margin requirements as well as the commissions paid out. Yes, you may make some money but your profits will be eaten into by the costs incurred. Whereas a pattern day trader must have a margin account that has at least $25,000 in order to trade in stocks, an e-mini futures trader can trade with as little as $500 per contract in the e-mini futures market with an online broker. This has given many the opportunities to participate in the futures market without requiring a small fortune to enter in it.
You cannot talk about e-mini futures without mentioning leverage. Leverage is the primary attraction of traders to the and while the leverage in full sized contracts if huge, the leverage required for trading in e-min index futures is relatively affordable. For instance, with an e-min Dow priced at $5 for each point, a trader can make even more money in a 200 point day trading the e-mini Dow than they would make trading the options or diamonds with significantly less capital to boot. However, leverage can be double edged sword and the same 200 point that makes a trader want to dance on the table can go badly and make you incur losses. When used wisely, leverage can be a great tool to use in making fortunes. Educating yourself on how to properly make use of the leverage you have is important at this stage.
