Micro E-Mini Futures Ebook! Compliments of Infinity Futures

Micro E-mini Futures eBook! Compliments of Infinity Futures

TM Source: Infinity AT

Trading Futures, Options on Futures involves substantial risk of loss and is not suitable for all investors. Past Performance is not indicative of future results. © 2020 Infinity Futures, LLC. All Rights Reserved.

Micro E-mini Futures

Meet a smaller-sized contracts designed to make futures trading more accessible to individual traders. Trade a slice of our most liquid markets with the same capital efficiency, flexibility and diversification potential as standard futures, but for a fraction of the upfront financial commitment.

More access with 24-hour trading

When something big happens, why wait? Nearly 24hour trading means you can act fast to adjust as soon as markets move on global news.

More flexibility

Micro futures let you fine-tune your exposure and go short as easily as you can go long: no short-selling restrictions. Ease of going short!

More capital efficiency

At a fraction of the size of their standard or E-mini counterparts, Micro futures carry a smaller margin requirement. More exposure, less capital.

More opportunity

https://www.infinityfutures.com Explore markets that you may have thought were out of [email protected] reach: gold, a major equity index, a major currency. Add Twitter: @InfinityFutures the benefits of diversification for lowering risk and Instagram: @infinityfutures +1.312.373.6220 increasing potential for rewards.

Micro E-mini S&P 500 Futures

Micro E-mini S&P 500 futures (product symbol MES) are based on the S&P 500 Index, a broad-based market capitalization weighted index that tracks 500 of the largest (or large-cap) U.S. companies. This index is widely followed as a key indicator of the health of the U.S. stock market, This smaller-sized electronic futures contract gives traders an opportunity to take positions on whether the performance of the S&P 500 Index will go up or down in value.

At $5.00x's the S&P 500 Index price, Micro E-mini S&P 500 futures provide a broader universe of individual traders the opportunity to discover the benefits of trading futures by lowering the amount of money required to enter the market.

Why Trade Micro E-mini S&P 500 Futures

As a leading gauge of U.S. economy, this contract offers hedging and risk management opportunities against volatile moves in the U.S. stock market performance. More cash efficient than trading the equivalent ETF. The global markets don’t sleep. This contract allows traders stock exposure and growth opportunities in an index that offers almost 24-hour trading, six days a week.

How do you trade E-mini S&P 500’s?

Micro E-mini S&P 500 futures are “futures contracts” on an equity index benchmark. They are cash-settled contracts with quarterly expiration dates scheduled for the months of March, June, September, and December. https://www.infinityfutures.com With a single transaction, investors can use equity index [email protected] Twitter: @InfinityFutures futures products to manage risk or seek profits based on Instagram: @infinityfutures whether they think the stock market performance will rise +1.312.373.6220 or fall.

Micro E-mini Russell 2000 Futures

Micro E-mini Russell 2000 futures (product symbol M2K) are based on the Russell 2000 Index. The Russell 2000 Index is a broad-based market capitalization weighted index that tracks 2,000 small capitalization stocks covering a wide variety of sectors in the US economy. The Russell 2000 is considered a leading benchmark for U.S. small-cap stocks. This smaller-sized electronic futures contract gives traders an opportunity to take positions on the performance of the Russell 2000 index.

With a contract valued at $5 x the Russell 2000 Index price, Micro E-mini Russell 2000 futures give more traders the opportunity to discover the benefits of futures, by lowering the amount of money required to enter the market.

Why Micro E-mini Russell 2000 Futures

Leading indicator to where other indexes may move towards. Allows for hedging opportunities against the Russell ETF or other basket small cap stock positions. The global markets don’t sleep. This contract allows traders stock exposure and growth opportunities in a price weighted index that offers almost 24-hour trading, six days a week.

How do you trade E-mini Russell 2000’s?

Micro E-mini Russell 2000 futures are “futures contracts” on an equity index benchmark. They are cash-settled contracts, and these have quarterly expiration dates scheduled for the months of March, https://www.infinityfutures.com June, September, and December. [email protected] Twitter: @InfinityFutures With a single transaction, investors can use equity index Instagram: @infinityfutures futures products to manage risk or seek profits based on +1.312.373.6220 whether they think the index performance will rise or fall.

Micro E-mini NASDAQ 100 Futures

Micro E-mini Nasdaq-100 futures (product symbol MNQ) are based on the Nasdaq-100 Index, which tracks 100 of the largest (large-cap) domestic and international non- financial companies listed on the Nasdaq based on the market capitalization. This smaller-sized electronic futures contract gives traders an opportunity to take positions on whether the performance of the Nasdaq100 Index will go up or down in value.

With a contract valued at $2.00x's the NASDAQ-100 Index price, Micro E-mini Nasdaq-100 futures give more individual traders the opportunity to discover the benefits of futures, by lowering the amount of money required to enter the market.

Why Micro E-mini NASDAQ 100 Futures

Offers hedging and risk management opportunities against volatile moves in tech-based and other non- financial companies.

More cash efficient than trading the equivalent ETF. The global markets don’t sleep. This contract allows traders stock exposure and growth opportunities in an index that offers almost 24-hour trading, six days a week.

How to trade Micro E-mini NASDAQ?

Micro E-mini Nasdaq-100 futures are “futures contracts” on an equity index benchmark. They are cash-settled contracts, and these have quarterly expiration dates

scheduled for the months of March, June, September, and December. https://www.infinityfutures.com [email protected] With a single transaction, investors can use equity index Twitter: @InfinityFutures futures products to manage risk or seek profits based on Instagram: @infinityfutures whether they think the index performance will rise or fall. +1.312.373.6220

Micro E-mini Dow Futures Micro E-mini Dow futures (product symbol MYM) are based on the Dow Jones Industrial Average. This index tracks 30 of the largest blue-chip companies in leading sectors of the U.S. economy and serves as an indicator of the health of the U.S. stock market. This smaller-sized electronic futures contract gives traders an opportunity to gain exposure on all 30 listed companies by trading a single contract.

With a contract valued at $0.50x's the DJIA Index price, Micro E-mini Dow futures give more traders the opportunity to discover the benefits of futures, by lowering the amount of money required to enter the market.

How do you trade Micro E-mini Dow’s?

Offers traders capital efficiencies vs. ETF products. Ability to short the index without stock loans or variable fees.

The global markets don’t sleep. This contract allows traders stock exposure and growth opportunities in a price weighted index that offers almost 24-hour trading, six days a week.

HOW DO YOU TRADE MICRO E-MINI DOW FUTURES? Micro E-mini Dow futures are “futures contracts” on an equity index benchmark. They are cash-settled contracts, and these have quarterly expiration dates scheduled for the months of March, June, September, and December.

With a single transaction, investors can use equity index futures products to manage risk or seek profits based on https://www.infinityfutures.com whether they think the index performance will rise or fall. [email protected] Twitter: @InfinityFutures Instagram: @infinityfutures +1.312.373.6220

Who Should Trade Micro E-mini Stock Index Futures?

Traders in any of these categories can benefit from trading the CME Group’s Micro E-Mini Futures.

 Equity Traders  Options Traders  FOREX (Over the Counter) Traders  ETF Traders  CFD Traders  Bitcoin Traders

Limited Risk Capital.

Traders with limited capital or who are not ready to risk more capital are now able to trade stock index futures. These markets will provide liquidity and exposure to the major stock indices and are accessible to virtually all traders. With the launch of smaller sized Micro E-mini futures, it will take less upfront investment to enter the market and enjoy the benefits of these markets.

Transitioning from ETFs and Individual Stocks to Futures.

Trading ETFs? Futures offer a capital-efficient alternative to trade equity index benchmarks like

the S&P 500 and Nasdaq-100. Many ETF and equity traders are hesitant to trade the futures

market due to the fear of the unknown. These smaller contracts can help mitigate these fears.

For many, these markets will be a gateway to the classic size (larger) stock index futures markets.

Since there are limitations with simulated trading, participating in these markets will provide a

real live trading experience. Note: there is no interest charged on margin accounts.

Traders that want fractional lot sizes. (e.g. 15 micros = 1.50 E-minis).

The Micro E-Minis allow traders to trade fractional sizes. For example, 5 Micro E-Mini S&P 500 = ½ E-mini S&P 500. By establishing a position of 15 Micro E-Mini S&P 500 contracts you are essentially

establishing a 1.5 E-mini S&P 500 position. This can be helpful for traders zeroing in on the proper trade size based on their account capitalization and trading methodology. Scaling up an account in this fashion can be beneficial. Because Micro E-mini futures are fully fungible with classic E-mini contracts, you have more flexibility for managing positions as market conditions change, using the contract that best suits your goals. You also have greater access to the liquidity you need.

Traders who are new to futures.

For traders new to futures, these new markets are excellent starting points for learning about the futures markets, including such unique features as: Using a trading ladder with bids and offers up to 10 ticks deep, instant fills and trade confirmation, marked-to-market open positions, trading around the clock, the responsible use of leverage, and going long or short whenever you like on the turn of a dime.

Margins

In futures trading, depending on the capital in your account, traders can obtain lower margin requirements than other types of securities. Because of this traders can have a greater level of leverage. The lower the margin, especially Day Trading Margins, the higher the leverage and riskier the trade. Leverage can work for you as well as against you, it magnifies gains as well as losses.

Over Night Margins (or performance bonds) are set by the futures exchange. Initial margin is the amount of money you need to have in your account to establish and HOLD a position past the close of any given daily session. This margin is set by the exchange and can change at any time.

Day Trade Margins, in many cases, are set by the FCM or brokerage firm. These can be in place for positions that are opened and closed in the SAME trading session. Day trade margins will magnify the risk per capital of a trade. Use day trade margins gingerly and wisely. Day trade margins are also subject to change based on market conditions. Traders experience and account size are also taken into consideration when determining day trading margins.

Notional Value

The Micro’s as “small” but mighty. The range of notional value as of February 18., 2020 for a single Micro contract ranges between $14,684 to $19,480. Note: as the market price changes the notional value changes. The equation is simple, Market Price X Multiplier = Notional Value. The table below outlines the notional value of each of the four stock index futures micro contracts.

Notional Value represents the total value of the investment you either bought or sold. Trading Hours

Trade Around the Clock

Micros are traded electronically on the CME Globex exchange. Hours for the Stock Index Futures are:

Sun-Fri: 5:00 p.m. to 4:00 p.m. -23 Hours Mon-Fri: Daily trading halt from 3:15 p.m. to 3:30 p.m.

Benefits -Futures market trade nearly around the clock Sunday evening through Friday afternoon. -Take Advantage of after-hours earnings announcements. -Take Advantage of European (non-US hours) trading activity & events. -Turn risk on or off between day and night “sessions”.

Because ES futures trade nearly 24 hours a day, you can act on global news and surprise market events as they unfold – adjusting exposure instead of missing out and watching from the sidelines.

Take advantage of after-hours earnings announcements.

According to Kellogg Insight. “the opening bell of the New York Stock Exchange rings at 9:30 a.m. Eastern time, and the closing bell sounds at 4 in the afternoon—yet 95 percent of publicly traded companies announce their quarterly earnings outside of those official hours.” Many companies release earnings after the close. Trading Stock Index futures during these times is just as easy and efficient as trading during regular trading hours. Trading ETF’s and individual equities off hours is difficult and tricky.

Take Advantage of European (non-US hours) trading activity & events.

There are several major global trading hubs in the world including New York, London, Frankfurt and Tokyo. Traders and investors associated with these hubs have a global investment interests and as such, the US markets are influenced and traded.

Turn risk on or off between day and night “sessions”

Traders may want to ameliorate their market exposure at night. The futures markets allow a cost effective and efficient way of taking off a trade at the end of the day and getting back into the position the next morning.

Special Events

Special events can cause mild to significant market volatility. Some special events like the U.S. presidential election are scheduled in advance. Some are scheduled in advance with many twists and turns along the way, like Brexit. And some special events sneak up on you. Do you remember this one in January 2016 “BOJ stuns markets with surprise move to negative interest rates”?

The last U.S. presidential election is a great example of a special event. The E-Mini S&P 500 market was responsible for a significant amount of trading, investing and hedging activity the night of that election.

Factors that affect the Stock Index Markets.

Economic Health There are various measures and indicators of economic health. Gross Domestic Product (GDP) is a popular measure. GDP has a significant influence on the direction of the stock market. A rosy GDP could mean that companies will report better earnings.

International Relations. Free trade is important to both domestic importers and exporters. Tariff battles, for example, can affect businesses and ultimately profitability.

Interest Rates The cost of money, some would argue, is the most important factor related to long term equity prices. Since the Federal Reserve Board (Fed) implemented their low interest rate policy and Quantitative Easing programs, the equity markets have mustered a substantial rally over the last 10 years. And many, as of the date of this writing, think we may have no end in sight.

Fear Response Events. Money flows into and out of various markets on a continuous basis. Certain events can cause traders and investors to move money out of risk-based investments and into more conservative investments like US Treasuries and Cash. These events and investor responses can have a quick and immediate effect on equity prices. A good example of this occurred on December 1, 2017, when ABC report Trump/Flynn/Russia connection that that turned out to be untrue – The equity index markets temporarily and abruptly tanked.

Key Economic Reports

Non-Farm Payroll Monthly report showing changes in U.S. jobs. Drives Fed policy and indicates economic growth.

Unemployment reports Presents U.S. unemployment rate as percentage. Drives Fed policy and indicates economy’s strength.

Earnings releases Lists changes in earnings of publicly traded companies, which can move the market.

FOMC Determines U.S. monetary policy and whether to move the key interest rate. Drives stock market movements.

Federal Reserve open market operations Indicates the buying and selling of securities by U.S. central banks as a tool of monetary policy.

CPI (Consumer Price Index) Measures inflation or cost-of-living changes through an average price of a basket of goods and services.

Inventory reports Tracks changes in oil and natural gas supplies. Impacts energy prices paid by consumers.

Industrial production Tracks change in monthly raw volume of industrial goods produced.

Who Uses Stock Index Markets?

Equity index markets are used by a wide range of traders and investors, including portfolio managers, endowments, asset managers, mutual and ETF funds, and self-directed traders.

Portfolio Managers Portfolio managers (PMs) are responsible for managing equity market risk for their clients. Equity index futures lend themselves to a variety of risk management strategies to either reduce risk or enhance returns.

Funds Endowment, pension and mutual funds generally take a long-term investment view. They may focus a substantial part of their investments in equity markets to help achieve their long-term capital growth objectives.

Self-Directed Traders Self-directed traders can use equity index futures to express a view on the overall equity market. Rather than having to evaluate individual share values, they can trade the entire index using the futures contract. Self-directed traders include day, swing and position traders.

Trading Strategies

Outright Bull/Bear directional trades. Traders may form an opinion on the long-term direction of a market. Their objective is to establish a position either long or short and hold the position throughout the trend. The chart below is showing a clear bull channel. If you were short this market, things were good; if long, this market was good.

Breakout Trades

In this example, the market is in a tight trading channel for 13 bars in a row. On the 14th bar the market breaks out of the channel. On a breakout trade, one could buy on the close of the 14th bar on the expectation that the buyers will jump on board and continue to push market prices higher. A breakout opportunity could also happen on the bottom of the channel creating a short trade idea.

Reversion to the point of control.

Since the Micro Mini Stock Index Futures are trading on a regulated exchange, it is easy to chart the volume of contracts traded at any given price throughout the day.

The chart on the right shows a bell-shaped histogram representing volume. On normal distribution days, traders will seek to go long or short as the market moves away from the mode (Point of Control) in the expectation that prices will eventually revert to the mode at some point during the trading session.

Retracement Trades

Futures markets do not have a tendency to go straight up or straight down. Trends slow down, traders take profits, and temporary fear can set in. This results in volatility and a rocky trajectory. Using retracement levels (e.g., Fibonacci) highlights areas of support and/or resistance, which can be used for entries, exits and stops. In the chart below, a trader may decide to enter a long position once the market trades below the 38.2% retracement level on the assumption that the market will return to a bullish state.

History of Stock Index Futures at the CME