Indices Market

Equity Index Futures

Introduced by the CME in 1982, stock index futures have grown to become one of the most popular trading vehicles perhaps second only to interest rates contracts. Broadly utilized by both speculators and institutional investors, the stock index contracts are designed as a basket of stocks.  Stock Indexes are commonly referenced as a guide to the overall condition of the stock market and broad economic activity.  As a result the underlying movement of these indices can have a dramatic impact on the price movement of all commodities.

As the popularity of stock index trading grew, the CME in 1997 introduced the “E-mini” S&P contract. Smaller in size than the full-sized S&P contract the E-mini trades exclusively on an electronic basis.  The design was widely accepted, expanded to other stock indexes, and has become the most popular line of stock index futures now available.

Highlighted Contracts

E-mini S&P 500 – The E-mini S&P 500 futures contract is one-fifth the size of the standard S&P 500 futures larger contract and is based on the same underlying index of 500 of the largest highly capitalized companies.  A preferred trading instrument for many this E-mini contract demonstrates liquidity, greater affordability for individual investors and around-the-clock trading.  The E-mini S&P is currently the most actively traded of the stock indexes futures.

E-mini NASDAQ 100 – Launched in 1999 the E-mini NASDAQ the contract size is one-fifth that of the larger NASDAQ-100 Index contract.  Consisting of 100 of the largest domestic and international non-financial securities on the Nasdaq Stock Exchange, a proprietary algorithm is used to adjust to review its components quarterly to meet pre-determined criteria.  Characterized by many as a technology index, it actually contains many holdings including retail and wholesale trade, technology, telecommunications and computer hardware and software firms.

E-mini DOW – Introduced in 2002 the “mini-Dow” is traded exclusively electronically on the CME Globex platform and is one-fifth the size of the Dow Jones Industrial Average.  The underlying Dow is a price-weighted index of 30 U.S. blue-chip companies.  Technology, retail, consumer goods, entertainment along with financial services are represented.  This contract is used by both entry-level and professional traders and is one of the most recognizable indices in the world.

Reports to Watch

Durable Goods Report
Consumer Confidence
Initial Jobless Claims Report

Resources

Standard and Poor’s
Nasdaq