NexusFi: Find Your Edge


Home Menu

 





Risk of trading micro futures


Discussion in Emini and Emicro Index

Updated
      Top Posters
    1. looks_one lostboy with 10 posts (8 thanks)
    2. looks_two josh with 4 posts (10 thanks)
    3. looks_3 Blash with 3 posts (7 thanks)
    4. looks_4 DavidCarmichael with 1 posts (1 thanks)
      Best Posters
    1. looks_one josh with 2.5 thanks per post
    2. looks_two Blash with 2.3 thanks per post
    3. looks_3 DavidCarmichael with 1 thanks per post
    4. looks_4 lostboy with 0.8 thanks per post
    1. trending_up 6,475 views
    2. thumb_up 27 thanks given
    3. group 9 followers
    1. forum 22 posts
    2. attach_file 1 attachments




 
Search this Thread

Risk of trading micro futures

  #21 (permalink)
DavidCarmichael
Bangor, Wales
 
Posts: 16 since Sep 2015
Thanks Given: 6
Thanks Received: 10


lostboy View Post
Hi traders, I have a question regarding micro futures and risk exposure. Its pretty basic actually, however I couldenīt find a clear answer online.

Since futures using leverage I`m moving a big contract with a small amount of money. Lets say I enter the market and set a 1 point stop. In case that stop got hit, I loose 5$. So the risk I take is limitet to 5$ and I`m not responsible for the big contract I move thru the leverage? In other words, my loss is limited to 5$ per point.

Am I right?

Your explanation above is pretty much correct.

If the value of 1 point in your chosen contract is $5, and you set a 1 point stop, then your loss will be limited to $5 (plus any slippage on the order, which would be unlikely to exceed a tick or two at most).

You mention "the big contract that you move through leverage" . . . There is only one contract: it's the contract you're trading. Which in your example has a value of $5 per point. There is no other contract you need to worry about.

Similar contracts may move in larger amounts per point, but they're nothing to do with you or your trade. If you're trading the Micro S&P500 for example, then there's the Mini S&P500, which is 10x the value at $50 per point, and the full sized S&P500 contract, which I believe is 10x the value again at $500 per point. You're not using leverage to trade any of these contracts though - you're just trading the Micro contract, and that is what will determine how much you make/lose on any given trade.

It may be worth doing some further reading around the contracts and how leverage works before you start trading. The micros are all relatively new products, and I'm pretty sure that the CME went to a fair amount of effort to provide educational resources when they launched them - have a look on the exchange's website and I expect you'll find some clear videos and whatnot to explain things.

Reply With Quote
Thanked by:

Can you help answer these questions
from other members on NexusFi?
Futures True Range Report
The Elite Circle
Deepmoney LLM
Elite Quantitative GenAI/LLM
Exit Strategy
NinjaTrader
Are there any eval firms that allow you to sink to your …
Traders Hideout
Better Renko Gaps
The Elite Circle
 
Best Threads (Most Thanked)
in the last 7 days on NexusFi
Get funded firms 2023/2024 - Any recommendations or word …
61 thanks
Funded Trader platforms
39 thanks
NexusFi site changelog and issues/problem reporting
26 thanks
Battlestations: Show us your trading desks!
24 thanks
The Program
18 thanks
  #22 (permalink)
Noobtrader123
Houston, Texas
 
Posts: 13 since May 2020
Thanks Given: 0
Thanks Received: 9


lostboy View Post
Hi traders, I have a question regarding micro futures and risk exposure. Its pretty basic actually, however I couldenīt find a clear answer online.

Since futures using leverage I`m moving a big contract with a small amount of money. Lets say I enter the market and set a 1 point stop. In case that stop got hit, I loose 5$. So the risk I take is limitet to 5$ and I`m not responsible for the big contract I move thru the leverage? In other words, my loss is limited to 5$ per point.

Am I right?

Correct, for the MicroES 1pt=$5. Just remember the ES is around 2950 points. It is easy to think of it as $2950 but for each $1 lost or gained on the ES it is actually $5 to your account (plus commissions).

Reply With Quote
Thanked by:
  #23 (permalink)
 
josh's Avatar
 josh 
Georgia, US
Legendary Market Wizard
 
Experience: None
Platform: SC
Broker: Denali+Rithmic
Trading: ES, NQ, YM
Posts: 6,216 since Jan 2011
Thanks Given: 6,752
Thanks Received: 18,136



DavidCarmichael View Post
the full sized S&P500 contract, which I believe is 10x the value again at $500 per point

For posterity -- big spoos are 5x mini's, at $250 per handle per contract (with increments at 0.1 instead of 0.25 for a $25 per tick increment), but with so few trading, who's counting?

Reply With Quote




Last Updated on May 24, 2020


© 2024 NexusFi™, s.a., All Rights Reserved.
Av Ricardo J. Alfaro, Century Tower, Panama City, Panama, Ph: +507 833-9432 (Panama and Intl), +1 888-312-3001 (USA and Canada)
All information is for educational use only and is not investment advice. There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
About Us - Contact Us - Site Rules, Acceptable Use, and Terms and Conditions - Privacy Policy - Downloads - Top
no new posts