What are Index Futures?
Future contracts originate from commodity trading. A future contract is an obligation to buy/sell a certain quantity of commodity at a specific date for a specific price determined at the outset of the contract. Future contracts are frequently used for hedging risks and also for speculation.
Financial In Market For example, with the recent hike in oil prices, an airline company which uses a lot of fuel might want to hedge it's exposure to oil prices through the purchase of oil futures. If the price of oil is $60 now and is expected to go up to $70 within 3 months, the airline would hedge its exposure by purchasing the 3 month future contracts so long as the agreed price is less than $70.
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Oriental Trading Oil prices now $60
Expected oil price in 3 mth's time (by airline) $70
Price of 3 mth oil contract (by oil producer) $68
Actual price 3 mths later $65
When day trading futures, never carrying a position overnight. Since the overnight moves of the market are difficult to predict, many traders avoid risk by day trading. Ironically, the public... Moving Averages vs Support and Resistance When day trading the SP and Nasdaq futures, do you rely on your moving averages more than your support & resistant areas During the first hour of trading, the support and resistance zones on the SP and Nasdaq futures are the most important...
Financial Forex Forex Software Let's assume the airline can find an oil producer willing to sell oil 3 month later for $68, the company would enter a futures agreement with this oil producer for delivery of a certain quantity of oil in 3 month's time. If the price of oil falls to $65, the airline still has to purchase at the agreed price of $68. But what propelled the airline to enter the futures contract in the first place is its expectations of future oil prices going up to $70 in 3 months and buying at a price below $70 (3 months later) seemed reasonable to the company.
index future or option. Clear as mud Hang in there; it's easy once you understand the basic idea. - profit from the difference in price between the buy and sell. For example, let's assume you find stock ABC that trades on both the NYSE and NASDAQ. You see it is trading for $10 on NASDAQ and $10.50 on NYSE so you buy 1, 000 shares from the NASDAQ and simultaneously sell 1, 000 shares on NYSE. You profit by taking the .50 difference on the 1, 000 shares for a quick $500 profit in a matter of minutes ... if everything goes as planned.
Trading Index futures are cash settled, there is no physical delivery of commodity as in the case of wheat, corn, etc. Although index futures can also be held for the long term, the time span we are concentrating on is a day. We are using the index futures as a vehicle for speculation and not for hedging as in the case of the airline company.
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Trading Financial System ---------------------------------------------------------------------
is for trading education only. There are no trading recommendations for any one individual made on this site and this information is paper trades for trading education. All trades are extemely risky and only risk capital should be used when trading. These are all hypthetical trades only. All information believed to be reliable. But can not be guaranteed. U.S. Commodity Futures Trading Commission
Day Trading What is the Emini S&P 500 and NASDAQ 100?
NASDAQ 100 and S&P 500 index futures is listed on the Chicago Mercantile Exchange (CME) and trades on the Globex electronic system. CME acts as the counter party for each trade, hence if you short futures, CME will be taking the long position and vice versa.
Forex Financial Trading The NASDAQ 100 Emini contracts is actually one fifth the size of their larger counterparts, the NASDAQ 100 index futures. Each point of the index will represent $20 and the minimum fluctuation ( tick size ) is 0.5 points which is equivalent to $10.
Fortune Make Option Trading S&P 500 Emini contracts is actually one fifth the size of their larger counterparts, the S&P 500 index futures. Each point of the index will represent $50 and the minimum fluctuation ( tick size ) is 0.25 points which is equivalent to $12.50.
Science Of Financial Market Globex opens from 16:30(EST) on weekdays and 18:00(EST) on Sundays and public holidays. The closing time is 16:15(EST) on all days. However, there will be a scheduled maintenance of Globex from 17:30 till 18:00 (Monday through Thursday, nightly). I know the timings can be quite complicated, however as day traders, we are mostly concerned with trading when the market is opened as we have to capitalize on the higher liquidity available. I do not recommend entering trades after market hours, due to low volume which leads to slippage. The time span you have to concentrate on is really the market opening hours from 9:30 till 16:15 (EST).
Future Trading More information regarding the contract specification of the Emini can be found on CME's website.
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Commodity Trading symbols for the S&P 500 and NASDAQ 100 Emini index futures
Both the NQ and ES emini contracts have expiry months in March, June, September and December which are denoted by the letters "H", "M", "U", "Z" respectively. Hence NQ05Z will represent the NASDAQ 100 emini contract
Financial Services Trading with expiry month in December 2005. Similarly, ES06H will be the symbol for an S&P 500 emini contract with expiry month in March 2006.
Online Forex Trading March H
June M
September U
December Z
Financial Portfolio Trade
Michael Taylor is a professional trader and webmaster of www.daytradeemini.com He regular updates his trading blog at www.daytradeemini.com/blog with educational articles and trading records.
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