Welcome to E-Mini S&P Futures Strategies, Mini Dow, Mini Russell and Mini NASDAQ Trading - A discussion dedicated to independent traders of futures stock Indicies
Volatility Index
The CBOE Volatility Index (“VIX”) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. In other words, VIX uses options pricing as a way to measure perceived market risk and uncertainty. Since its introduction in 1993, VIX has been considered by many to be the world’s premier barometer of investor sentiment and market volatility.
VIX is an up-to-the-minute estimate of expected volatility that is calculated by using real-time S&P 500 Index option bid/ask quotes. VIX uses nearby and second nearby options with at least 8 days left to expiration and then weights them to yield a constant, 30 day measure of the expected volatility of the S&P 500 Index.
VIX Futures
These innovative futures provide a pure play on implied volatility independent of the direction and level of stock prices. VIX futures may also provide an effective way to hedge equity returns, to diversify portfolios and to spread implied against realized volatility.
- Depending on how the market perceives volatility, the price of a VIX futures contract can be lower, equal or higher than the VIX spot price.
- VIX futures are standard futures contracts that cash settle to a Special Opening Quotation of VIX.
- There is no cost-of-carry relationship between the price of VIX futures and VIX.
- VIX futures are cash-settled.
- Futures on VIX trade electronically on the CBOE Futures Exchange.
View VIX futures contract specifications.
VIX Options
VIX options are a securities product and customers will need to have a securities account in order to trade VIX options. Besides being one of the largest Futures Commission Merchants in the world, Vision is also a securities broker/dealer. We support trading in VIX options as well as other securities products.
The VIX formula isolates expected volatility from other factors affecting option prices, such as changes in underlying price, dividends, interest rates and time to expiration. As such, VIX options offer a way for investors to buy and sell option volatility simply and directly, without having to deal with the other risk factors that would otherwise have an impact on the value of an SPX option position.
- VIX options are 1/10th the size of the futures contracts, but they are both cash-settled to the same value.
- The underlying for VIX options is the expected value of VIX at expiration, rather than the current, or spot VIX value.
- VIX options are European style options and can only be exercised on the expiration date.
- VIX options expire on Wednesday as opposed to stock options which expire on a Friday.
View VIX options contract specifications.
Mini-VIX Futures
Mini-VIX futures are for sophisticated investors who are looking for a smaller scale play on implied volatility that is independent of the direction and level of stock prices. The smaller VIX futures contracts with proportionally lower margins may be more manageable for a wider variety of users.
- Mini-VIX futures are 1/10th the size of CFEs standard CBOE VIX futures contracts.
- The smaller contracts feature a $100 multiplier versus $1,000 for the larger VIX futures contracts.
- Mini-VIX futures have a minimum price movement (tick) of $5 per contract.
- The contracts are cash-settled.
View Mini-VIX futures contract specifications.
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The CME will be launching six currency pairs on March 23rd, on the following six currencies: EUR/USD, USD/JPY, GBP/USD, USD/CAD, AUD/USD, USD/CHF
This could provide a great opportunity for those who trade cash FX with small accounts and are looking for a regulated environment, where market makers can’t just move a market and trigger stops.
All currencies are quoted in Interbank Terms. The largest regulated Forex market. If you would like to trade in a regulated, secure Forex market, get to know the new Forex E-micro futures, traded at CME.
One-tenth the size of the standard Forex futures. View contract size: http://www.cmegroup.com/trading/fx/files/FX-211_Forex_Emicros_Sell_Sheet.pdf
View the webinar: http://progressive.powerstream.net/008/00102/edu/forex_emicro/player.html
As an S&P day trader I have observed that the 3 to 3.30PM is a critical time for the stock index. There are two possible scenarios that could possibly happen during this time frame:
• The major trend of the day intensifies and continues into the close of the day at 4:15 pm
• Complete reversal of the trend for that day into the closing of the day.
Is this a tradable setup? Yes, it is.
Here are some caveats as to what could happen: I have noticed that professional traders and market makers tend to move the market in the opposite direction before they actually re-enforce or contradict the prevailing trend.
So for example if at 3:00pm the market is heavily down, then starting at approximately 3:05 pm, the market could show signs of recovery and appear to reverse as if suddenly in an uptrend, when in fact it’s a fake out probably caused from profit taking.
The bottom line is that you should wait for the first 5 and sometimes 10 minutes after 3 to see exact direction.
Odds are that the prevailing trend will continue into the close. Of course, this is not written in stone and the market can reverse, so one still has to wait to get complete confirmation.
Fight your impulse to trade the over night market reaction, following any economic announcement. Have patience, and see what happens when the market open in the morning. Sometimes it’s a complete reversal. Patience is a virtue and in trading it would save you a bundle.
Whether you are a longer term trader or a short term trader, the same psychology could appear on a 3 min chart or on a weekly chart. Look at this post from Futures Portal
Courtesy of Genesis FT
One can not trade the emini S&P and/or other liquid indicies like Mini Dow and Mini NASDAQ unless you have a laser beam trading methodology. If there is a question that traders have asked themselves on a daily basis is “is the this the bottom”?
The bottom line is that regardless of the volatility level we can not guess tops or bottom by trader’s intuition.
Just when you think that a bottom it…it probably did not. Same goes to the up side.
What can you do to improve your trading?
1) Trail your stops as the maket goes your way. Again, stop guessing the ups and downs of the markets.
2) Once you placed your stops NEVER move them. Never!
Good Luck!
http://www.tradersplatform.com/contactus.htm
Listing Date Sunday, October 26, 2008 (trade date Monday, October 27, 2008)
Contract Name E-mini S&P 500 Euro denominated futures NP08-12
Description Futures replicating the popular E-mini S&P 500 contract with currency denominated in euros as opposed to USD
Instrument Type Futures
Product Code(s) EME
Ticker Symbol(s) EME
Trading Venue CME Globex® platform
Trading Hours Sundays through Thursdays from 5:00 p.m. Central Time (CT) to 3:15 p.m., CT next day, reopening between 3:30 pm and 4:30 pm CT
Contract Size €50 times the futures price
Valid Contract Months Dec08, Mar09, Jun09, Sep09, Dec09
Initial Contract Months Dec08
Minimum Price
Increments
0.25 index points for outrights
0.05 index points for calendar spreads
Value Per Tick €12.50 for outrights
€2.50 for calendar spreads
