Introduction to E-mini Russell 2000 Index Futures Contract
CME’s E-mini Russell 2000 Index Futures Contract, ticker symbol RTY, is a very liquid futures contract, and one of the most efficient and cost-effective ways to gain market exposure to U.S. small cap stocks. CME Group also offers futures contracts that track the Russell 2000 Growth and Russell 2000 Value indexes, as well as Options on the E-mini Russell 2000 Index futures.
The Russell 2000 Index is a broad-based, market capitalization weighted index that tracks 2000 small cap stocks covering a wide variety of sectors of the US economy. The Russell 2000 index is generally considered a key benchmark for small cap U.S. stocks. The E-mini Russell 2000 Index Futures Contract allows market participants to take positions on the performance of the Russell 2000 Index. Market participants can enter orders through the central limit order book (CLOB), block trades, BTIC (basis trade at index close), or EFP’s.
The E-mini Russell 2000 Index Futures Contract trades Sunday through Friday, from 5pm to 4pm central time, with daily trading halts from 3:15 to 3:30pm central time.
A single RTY contract has a value of $50 times the agreed upon E-mini Russell 2000 futures price, and trades in increments of 0.10 index points, with 1 tick equaling five dollars.
RTY futures expire on a quarterly basis, settling in cash to the opening value of the Russell 2000 Index on the 3rd Fridays of March, June, September, and December. Currently, RTY futures require approximately 4% as initial margin, resulting in over 25 times leverage on their position.
E-mini Russell 2000 Index Futures allow market participants to hedge their macro exposure or capitalize on anticipated movement in the underlying Russell 2000 Index, especially around major market moving events.