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Micro Futures Trading: Opportunities and Insights

Micro-Futures-Trading

On May 5, 2019, the CME Group introduced Micro E-mini futures contracts, marking a significant expansion in the futures market. These contracts allow participants to speculate or hedge on the price movements of major indices such as the S&P 500, Russell 2000, Dow Jones 30, and Nasdaq 100 at a fraction of the cost associated with traditional e-mini futures. Investors can engage in trading these indices with as little as $50 of day-trading margin per contract, making it an accessible option for portfolio diversification.

Micro Futures Contracts have rapidly gained popularity due to their smaller size—just 1/10th that of their e-mini counterparts. This scale makes futures trading accessible without the financial burden of larger contracts. For instance, while a single E-mini S&P 500 futures contract has a point value of $50, its micro version commands $5 per point, reducing the entry barrier significantly.

The value of these contracts varies by index: the Micro E-mini Nasdaq-100 has a $2 multiplier, while the Micro E-mini Dow operates with a 50-cent multiplier. Notably, the notional value of a Micro E-mini S&P 500 futures contract would be $13,750 if the S&P 500 index is at 2750.

The tick size for these micro contracts is also reduced proportionately. For example, the Micro E-mini S&P 500 has a tick increment of 0.25 points, equating to $1.25 per tick movement. This smaller tick size facilitates finer control over trading strategies and potential risk exposure.

Expanding Beyond Equities: Micro Futures in Commodities and Currencies

The micro futures market has expanded into commodities and currencies, offering diverse trading opportunities. Micro WTI Crude Oil, Micro Gold, and Micro Silver futures allow traders to engage with commodity markets with lower capital requirements. For example, Micro Gold futures are set at 10 ounces per contract, and Micro Silver futures at 1000 ounces, making these precious metals more accessible to individual investors.

Micro currency futures further exemplify this trend, enabling forex traders to manage exposure with contracts sized at just 1/10th of standard futures. This reduction allows traders to handle currency exposure with greater precision, utilizing contracts on major pairs like the AUD/USD, USD/CAD, and EUR/USD.

The Strategic Importance of Micro Indices and Micro Treasury Yields

Micro indices provide a comprehensive platform for traders looking to gain exposure to various sectors of the economy through indices like the Micro E-mini S&P 500, Micro E-mini Nasdaq-100, and others. Each index offers unique advantages depending on the trader’s focus, whether it’s technology stocks, small-cap companies, or blue-chip stocks.

In the realm of fixed income, Micro Treasury Yield futures offer a nuanced way to speculate on or hedge against interest rate movements. These contracts are cash-settled against benchmark Treasury yields, such as the 2-year, 5-year, 10-year, and 30-year benchmarks, with each contract providing a granular $10.00 DV01, allowing for precise interest rate risk management.

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This guide provides essential details for traders looking to engage with Micro Futures across various asset classes, including commodities, indices, cryptocurrencies, treasury yields, and foreign exchange.

Overview of Micro Futures Trading Options

Micro WTI Crude Oil Futures:

  • Contract Size: 0.1 ether
  • Ratio to Standard Contract: 1/10
  • Minimum Tick/Price Fluctuation: $0.50 per ether
  • Dollar Value of One Tick: $0.05 per contract
  • Product Code: MET
  • Settlement: Financial
  • Expiration Schedule: 4:00 p.m. London time on the last Friday of the contract month
  • Trading Hours: CME: Sun-Fri: 5 p.m. to 4 p.m., with a 60-minute daily trading halt beginning at 4 p.m. CT
  • Listing Exchange: CME

Micro Gold Futures:

  • Contract Size: 10 oz
  • Ratio to Standard Contract: 1/10
  • Minimum Tick/Price Fluctuation: $0.1 per troy ounce
  • Dollar Value of One Tick: $1.00 per contract
  • Product Code: MGC
  • Settlement: Deliverable
  • Expiration Schedule: 12:30 p.m. CT on the third last business day of the contract month
  • Trading Hours: COMEX: Sun-Fri: 5 p.m. to 4 p.m., with a 60-minute daily trading halt beginning at 4 p.m. CT
  • Listing Exchange: COMEX

Micro Silver Futures:

  • Contract Size: 1000 oz
  • Ratio to Standard Contract: 1/5
  • Minimum Tick/Price Fluctuation: $0.01 per troy ounce
  • Dollar Value of One Tick: $10.00 per contract
  • Product Code: SIL
  • Settlement: Deliverable
  • Expiration Schedule: Trading terminates at 12:00 Noon CT on the third last business day of the month prior to the contract month
  • Trading Hours: COMEX: Sun-Fri: 5 p.m. to 4 p.m., with a 60-minute daily trading halt beginning at 4 p.m. CT
  • Listing Exchange: COMEX

Micro Copper Futures:

  • Contract Size: 2500 pounds
  • Ratio to Standard Contract: 1/10
  • Minimum Tick/Price Fluctuation: $0.0005 per pound
  • Dollar Value of One Tick: $1.25 per contract
  • Product Code: MHG
  • Settlement: Financially Settled
  • Expiration Schedule: 12:30 p.m. CT on the third last business day of the contract month
  • Trading Hours: NYMEX: Sun-Fri: 5 p.m. to 4 p.m., with a 60-minute daily trading halt beginning at 4 p.m. CT
  • Listing Exchange: NYMEX

Micro Indices:

  • Micro E-mini S&P 500, Nasdaq-100, Russell 2000, Dow
    • Contract Sizes: $5 x S&P 500 Index, $2 x Nasdaq-100 Index, $5 x Russell 2000 Index, $0.50 x DJIA Index
    • Trading Hours and Venue: CME Globex: Sun-Fri: 5pm to 4:00pm
    • Minimum Tick/Price Fluctuation: Outright 0.25 Index points, 0.10 Index points, 0.50 Index points
    • Dollar Value of One Tick: $1.25, $0.50, $0.50, $0.50 per contract
    • Product Codes: MES, MNQ, M2K, MYM (Globex and ClearPort)
    • Contract Months: Five months in the March Quarterly Cycle (H, M, U, Z, H)
    • Delivery: Cash settlement to Final Settlement Price
    • Termination of Trading: 8:30 a.m. CT on the 3rd Friday of the contract delivery month

Micro Bitcoin Futures:

  • Contract Size: 0.10 bitcoin
  • Trading Hours: CME Globex: Sunday – Friday 6:00 p.m. – 5:00 p.m. ET (5:00 p.m. – 4:00 p.m. CT) with a 60-minute break each day beginning at 5:00 p.m. ET
  • Minimum Price Fluctuation: Outrights: $5 per bitcoin = $0.50 per contract, Spreads: $1 per bitcoin = $0.10 per contract
  • Product Code: MBT
  • Listing Cycle: Six consecutive monthly contracts inclusive of the nearest two December contracts

Micro Treasury Yield Futures (2-Year, 5-Year, 10-Year, 30-Year):

  • Product Codes: 2YY, 5YY, 10YY, 30YY
  • Settlement: Cash-settled to BrokerTec benchmarks
  • Price Convention: US Treasury Yield
  • Contract Size: $10.00 DV01
  • Tick Size: $1.00 (1/10 of 1 bp)
  • Number of Expiries: 2 nearest monthly contracts
  • Termination: Last Business Day of Month

Micro FX Futures (AUD/USD, USD/CAD, USD/CHF, EUR/USD, GBP/USD, INR/USD, USD/JPY):

  • Contract Sizes: Varies (e.g., 10,000 Aussie Dollars, 12,500 Euros)
  • Ratio to Standard Contract: 1/10
  • Minimum Tick/Price Fluctuation: varies (e.g., 0.0001 USD, 0.01 JPY per USD)
  • Value of One Tick: varies (e.g., $1 per contract, 100 JPY per contract)
  • Product Codes: M6A, M6C, M6S, M6E, M6B, MIR, M6J
  • Settlement: Mostly physical, except for Micro INR/USD (Financial)
  • Trading Hours: Sunday – Friday 5:00 p.m. – 4:00 p.m. CT with a 60-minute break each day beginning at 4:00 p.m. CT

The Future of Micro Futures

Micro futures have democratized access to various asset classes, enabling traders and investors to leverage smaller, more manageable contract sizes for both speculative and hedging needs. Whether through equities, commodities, or currencies, these instruments provide a vital tool for managing market exposure and enhancing portfolio diversification.

For those looking to explore this dynamic segment of the financial markets, the CME Group’s platform offers a robust framework to engage with global indices, commodities, and currencies through micro-sized contracts tailored to individual and strategic trading needs.

Ready to Dive Into Micro Futures Trading?

Embark on your trading journey with Micro Futures today and leverage our platform’s comprehensive offerings to tailor your market strategies effectively. For further information or personalized advice, our expert team is ready to assist you in harnessing the full potential of micro futures trading. Sign up now to begin your journey in micro futures trading, or reach out to our seasoned professionals for insights and support.

Ready to start trading futures? Call US 1(800)454-9572 – Int’l (310)859-9572 email info@e-mini.com and speak to one of our experienced, Series-3 licensed futures brokers and start your futures trading journey with E-Mini.com today.

Disclaimer – Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.  Past performance is not indicative of future results. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

Important: Trading commodity futures and options involves a substantial risk of loss. The recommendations contained in this writing are of opinion only and do not guarantee any profits. This writing is for educational purposes. Past performances are not necessarily indicative of future results. 

**This article has been generated with the help of AI Technology. It has been modified from the original draft for accuracy and compliance.

***@cannontrading on all socials.

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