| Index Futures and Emini Trading | | | | the month but will be on the first Thursday if the |
| The core of my trading activity centers around | | | | first day of the month falls on a Friday |
| the index futures contracts. There are a wide | | | | * Volume shifts to the new contract at market |
| range of index futures contracts to trade and | | | | open (09:30 EST) on Rollover day |
| each has a distinct personality. I concentrate my | | | | * New day trading or swing trading positions |
| trading activities on three main financial | | | | opened on rollover day should use the new |
| contracts. Though there are futures contracts | | | | contract month irrespective of when you plan to |
| on all sorts of commodities, ranging from corn to | | | | close it. |
| energy to currencies. | | | | * New swing positions might be better opened |
| 1. S and P 500 (symbol ES) 1 point (4 ticks)=$50 | | | | using the new contract if opened within a few |
| 2. Nasdaq 100 (symbol NQ) 1 point (4 | | | | days of rollover day. |
| ticks)=$20 | | | | * Market myths abound at rollover and expiration. |
| 3. Dow 30 (symbol YM) 1 point (1 tick) | | | | Check the source and confirm the probabilities |
| =$5 | | | | before believing anything. |
| Often times I will ask traders just what exactly is | | | | All of the financial indexes are composites of the |
| an index contract and the wide variety of | | | | larger contract traded on the floor of the Chicago |
| responses I hear is a source of concern. The | | | | Mercantile Exchange. The "E" before each of the |
| fact of the matter, I am convinced, is that not | | | | contracts indicates that it is electronically traded. |
| many people know what they are trading and | | | | The indexes, then, are composites of groups of |
| rollover and expiration rules. | | | | stocks and may be weighted by the capitilization |
| Here are some important facts for your | | | | of the stock in the composite, depending upon |
| consideration: | | | | the index your are trading. A index futures |
| * Rollover is 8 days before expiration. | | | | contract is a derivative, not a direct invesment. |
| * Expiration is the third Friday of each quarter | | | | With all the talk of the horrors of derivative, |
| month (March, June, September, December) | | | | many are shocked to learn the futures contracts |
| * The contract letter associated with each month | | | | are, in fact, a form of derivative. |
| is: March=H June=M September=U December=Z | | | | So enjoy your trading of index futures contract |
| * Rollover is on a Thursday. | | | | and be aware of what you are trading and how |
| * Rollover is usually on the second Thursday of | | | | the contracts rolloever every three months. |