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Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers. While there, Paul authored and edited thousands of financial research briefs, was published on Nasdaq. com, Yahoo Finance, and dozens of other prominent media outlets, and appeared as a guest expert at prominent radio shows and i...

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Updated August 12, 2020

What is an E-Mini?

An E-mini is a stock index futures contract that is electronically traded on the Chicago Mercantile Exchange (CME) and is 1/5 the size of a standard stock index futures contract.

How Does an E-Mini Work?

An E-mini S&P 500 futures contract is valued using the following formula:

E-mini S&P 500 contract value = ($50) x (S&P 500 stock index)

As the price of the S&P 500 fluctuates, the price of the S&P 500 E-mini futures contract fluctuates as well.

For example, if the S&P 500 is trading at 1200, the S&P 500 E-mini futures contract would be valued at $50 x 1200 = $60,000.

An E-mini moves in "ticks" or price increments of 0.25 index points or $12.50. So if the price of the S&P 500 futures increases by 0.25, the value of the E-mini S&P 500 will go up by $12.50.

E-mini S&P 500 contracts expire on a normal quarterly schedule with expiration dates in March, June, September, and December of each year. E-mini contracts typically trade on the CME and they only trade electronically.

E-minis also exist for other indices, including the Nasdaq, Dow Jones Industrial Average (DJIA) and several commodities indexes.

Why Does an E-Mini Matter?

E-mini contracts are much more affordable to individual investors than regular sized stock index futures contracts.  They also offer a way to trade outside of normal trading hours. In fact, the S&P 500 E-mini contract trades 23.5 hours a day.

E-minis can be more liquid than standard futures contracts and have lower commissions -- but they can also be more volatile. For these reasons, more E-minis trade on the S&P 500 than standard S&P 500 contracts.

Because they are only 1/5 the size of a standard futures contract, they only require 1/5 the margin to trade as well (note that margin requirements vary by broker, however, and with leverage comes risk).

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