E-mini S&P 500 futures
The S&P 500 index is a widely recognized barometer of the U.S. stock market and is the benchmark used by most investment professionals. E-mini S&P 500 futures allow you to effectively buy or sell an extremely well-diversified portfolio of stocks, depending on your opinion of the overall stock market. The center of trading in stock index futures is the Chicago Mercantile Exchange (CME). In 1982, the CME introduced trading in S&P 500 stock index futures, and this contract now accounts for the vast majority of all U.S. stock index futures trading.
E-mini S&P 500 futures are powerful and versatile instruments, whether you intend to risk your own capital for investment reward, or wish to insulate your stock portfolio from risk. E-mini S&P futures afford some unique advantages, allowing you to:
The S&P index is based on the stock prices of 500 different companies - generally about 80% industrials, 3% utilities, 1% transportation companies, and 15% financial institutions. The market value of the 500 firms is equal to approximately 80% of the value of all stocks traded on the New York Stock Exchange. The four broad industry groupings are maintained in order to monitor the index's continued diversification. The number of companies in each grouping changes from time to time, to allow S&P more flexibility in choosing new companies for the index when openings occur.
The S&P 500 is a capitalization-weighted index reflecting the market value of the 500 listed firms. Each component stock's price is multiplied by the number of common shares outstanding for that company, and the resulting market values are totaled. The total market value of the 500 companies is then divided by a number called the Index Divisor. The total market value of all the 500 firms is compared to that for the base period (1941-1943 = 10) to derive the Index value. Because the Index is weighted in this manner, a price change in any one stock will influence the index in proportion to the stock's relative market value.
S&P adjusts the Index to avoid distortion when there are stock splits or dividends, other distributions or purchases of shared by the component company itself, mergers, acquisitions or divisional spin-offs. In each case S&P modifies the Index (through the divisor used to compare current to base value) between trading sessions. The Index then remains at the same value on the opening of trading as it was at the prior close, and any performance difference is insignificant.
E-mini S&P 500 futures, Chicago Mercantile Exchange, trading symbol ES. Contract size is $50 x the S&P 500 Index. Minimum tick is 0.25 = $12.50.
E-mini S&P futures trade nearly 24 hours per day on the CME Globex® trading platform, from 6:00 p.m. U.S. ET all the way until 5:00 p.m. U.S. ET the following afternoon.
E-mini S&P 500 futures trade on a quarterly cycle. Trading months include March, June, September and December.