E-mini futures

E-mini futures are smaller versions of standard stock index futures contracts, created to make index futures trading accessible to individual traders rather than only large institutions. The original and best known is the E-mini S&P 500, introduced by the Chicago Mercantile Exchange in the late 1990s, which represents a fraction of the value of the full stock index futures contract that came before it.

Because they trade electronically and require less capital per contract than the larger contracts they were modeled on, E-mini contracts quickly became the primary way most traders access index futures, and trading volume in products like the E-mini S&P 500 now dwarfs that of the original larger contracts. E-mini contracts exist on other major indexes as well, and they trade nearly around the clock on electronic markets, giving traders exposure to broad market moves outside of regular stock market hours.

E-mini futures are used both for speculation, since they allow a trader to take a leveraged view on the direction of an index with a relatively modest amount of margin, and for hedging, since a portfolio manager can quickly offset exposure to a broad market decline by selling E-mini contracts rather than trading a large basket of individual stocks. An even smaller version, the micro E-mini, was later introduced to lower the capital required further still, extending access to an even wider range of individual traders.