What are E-mini S&P 500 Futures? Facts on Futures Series 4 of 6: Wed Feb 5, 2025

You can watch the video and/or review the article below.

Before Deepseek scared the AI world’s pants off and tariffs stirred up trade wars, I shared my first half of my “Facts on Futures” series to teach you more about this amazing asset class. Let’s resume!

I’ve been a cheerleader for the E-mini S&P 500 futures for over 25 years, and I still am! And now it’s time for you to get to know it better.

What Does “E-Mini” Mean?

• E = Electronic: These contracts are traded electronically, via the CME's Globex electronic trading platform.
• Mini = Smaller Size: The E-mini S&P 500 futures contract is a smaller version of the full-sized S&P 500 futures contract, making it more accessible for traders with various account sizes.

Despite being smaller in size, E-mini S&P 500 futures remain one of the most liquid futures contracts in the world, making them a preferred choice for both institutional and retail traders.

Pricing Breakdown of E-mini S&P 500 Futures

E-mini S&P 500 futures are priced in points, and each point consists of four ticks. Here’s how the pricing works:

• Each tick = $12.50
• Four ticks = One point
• One point = $50 (since 4 × $12.50 = $50)

This standardized pricing structure allows traders to easily calculate their potential gains or losses based on market movements.

Exchange Information & Expiration

Unlike stock shares that you can buy and hold indefinitely, futures contracts have set expiration dates. E-mini S&P 500 futures follow a quarterly expiration cycle:

• March
• June
• September
• December

Traders MUST be aware of these expiration dates and manage their positions accordingly to avoid unexpected contract settlements.

For the E-mini specifically, you can find all pertinent contract info at the exchange website. If you’re old school like me you think of the Chicago Mercantile Exchange, but now they go by CME Group. https://www.cmegroup.com/markets/equities/sp/e-mini-sandp500.html

How to Trade E-Mini S&P 500 Futures

There are two primary ways to trade E-mini S&P 500 futures:

1. Trading the Futures Contract Directly
   • Buy or sell E-mini S&P 500 futures contracts based on your market outlook, trading plan, and risk management rules.
   • This is a straightforward way to gain exposure to the S&P 500 benchmark movement.
   • This is how I learned to trade from my dad, and what I still do, starting with my S&P Edge Pro research each morning.
2. Using Options on E-mini S&P 500 Futures
   • Traders can apply various option strategies to hedge risk, enhance profits, or define risk parameters.
   • Many traders in our community use options on ES futures to structure more complex trades.

Now that we’ve gotten clear on what the E-mini futures are, we’ll look at the baby of the S&P 500 futures family next. Stay tuned!