Don't Skirt These E-MiNY Futures Contracts

Electronic mini contracts, or fractional versions of bigger contracts that trade on an exchange, have been among the most successful futures contracts in derivatives history, gaining rapidly in terms of acceptance and volume.

Consider the E-mini S&P 500 contract traded on the Globex electronic platform through the Chicago Mercantile Exchange. When the contract started trading in 1997, daily volume was only about 9,000 contracts. Since then, volume has grown steadily and averaged 300,000 contracts a day in the second quarter of 2002.

Lower capital requirements (margins), near-instantaneous electronic trade executions, ease of shorting (no uptick required), virtual around-the-clock trading access, tight spreads (generally one tick in the E-mini S&Ps), declining commission costs and the ability to see the order book are among the factors accounting for the rapid growth of the contract. (If you are unfamiliar with the E-mini index products and would like more information, you can go to the CME's Web site and click on the "Daytrading the E-minis" tab for more information). ...