With the proliferation of index providers, traders seeking to gain exposure to global equities are presented with many different options. The Standard and Poor’s 500 (S&P 500) is widely regarded as the best single gauge of large-cap equities in the world’s largest economy, the United States.
CME Group has contracted with S&P Dow Jones Indices to list several different trading instruments that are based directly on the price of the S&P 500:
Given the prominence of the S&P 500 Index as the leading equity benchmark globally, it’s easy to understand the importance of the S&P 500 Index to an equity portfolio manager and institutions alike. However, there are significant features of this leading benchmark of interest to the individual investor, active trader, and day trader.
With its extensive history, traders can perform price and strategy analysis and back testing on up to six decades of index data.
If a trader seeks exposure to THE benchmark index of large-cap equities in the United States, there’s nothing more correlated to the S&P 500 than the S&P 500! Relying on an index that is “highly correlated” to the S&P 500 can expose a trader to tracking error and the potential frustration of “being right on the trade but wrong because of the trading instrument.” Instruments like the E-mini and Micro E-mini S&P 500 futures contracts settle exactly to the index value at expiration, eliminating this potential frustration.
With over $11 trillion benchmarked to the index and associated trading instruments, CME Group liquidity providers are able to provide consistently tight and efficient markets nearly 24 hours a day in the S&P 500 futures and options that trade more than $350 billion in value per day.
The deep, liquid futures markets help facilitate liquid options markets on both the E-mini and Micro E-mini S&P 500 futures.
* Source: CME Direct 2:15 p.m. Central Time, 8/20/2021
As with all futures and options products traded at CME Group, every trade is guaranteed by CME Clearing, mitigating bilateral counterparty risk in all transactions. CME Group has over 170 years of experience in providing fair, transparent, and competitive markets and associated risk management capabilities.
CME Group has an established, global network of brokers and liquidity providers contributing to around-the-clock liquidity.
With an expansive network of brokers, it is easier than ever for an individual to open an account to trade CME Group futures. For an individual to trade futures at CME Group, they simply must have a futures-enabled trading account with their broker. Most brokers have streamlined the account opening process, making it possible to open an account within a day or two in many cases. A list of brokers that offer CME Group futures can be found at cmegroup.com/activetrader/findabroker online.
For more information, visit https://www.cmegroup.com/microemini
Neither futures trading nor swaps trading are suitable for all investors, and each involves the risk of loss. Swaps trading should only be undertaken by investors who are Eligible Contract Participants (ECPs) within the meaning of Section 1a(18) of the Commodity Exchange Act. Futures and swaps each are leveraged investments and, because only a percentage of a contract’s value is required to trade, it is possible to lose more than the amount of money deposited for either a futures or swaps position. Therefore, traders should only use funds that they can afford to lose without affecting their lifestyles and only a portion of those funds should be devoted to any one trade because traders cannot expect to profit on every trade.
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The information within this communication has been compiled by CME Group for general purposes only. CME Group assumes no responsibility for any errors or omissions. Additionally, all examples in this communication are hypothetical situations, used for explanation purposes only, and should not be considered investment advice or the results of actual market experience. All matters pertaining to rules and specifications herein are made subject to and superseded by official CME, CBOT, NYMEX and COMEX rules. Current rules should be consulted in all cases concerning contract specifications.
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