E mini S&P 500 contracts

[BrendaPaf]

I heard trading e mini S&P 500 contracts was a good strategy for someone with a small amount of investing capital. Could someone please explain to me the cost of a contract and the margin requirments for a trade?

I have researched the topic and the cost of a contract is $50 * whatever the S&P is trading at (932). Which comes to $46,600. So how is this a strategy for someone with a small capital base? I talked to my broker and they stated that I would need around $5,000 to meet the margin requirement to trade. Not really understanding how this contract works....Thanks in advance.​

[bukirajuoici]

This should have a lot of the info you're looking for:

http://www.cmegroup.com/trading/equity-index/us-index/e-mini-sandp500_contract_specifications.html

The standard margin requirement is $5,625 for one E-mini S&P 500 contract right now, but depending on your broker that might be different. For example, some brokers have only a $500 per contract margin if you are daytrading only. As for the cost of a contract, you'll find that most brokers offer pretty fair prices. For example the broker I use, Thinkorswim, chargest $3.50 per contract, which is $7 a round trip. Not bad at all when you consider that stocks are $10-20 round trip.

So in that case, yes, they're good for small account sizes, but at the same time your money can disappear extremely quickly in futures. If you buy one contract on the E-mini S&P and it moves just one point against you, that's a loss of $50. If it moves two points against you, that's a loss of $100.

One and two point moves are not even big at all in the S&P 500, so that's why you have to be extremely careful not to get burned. Because when you get burned, you get burned.

[Calvinpa]

I definitely suggest you at least paper trade it a little to get a feel for it. You'll probably notice right off the bat that the ES (that's the symbol) just feeds off beginners and people who don't know what they're doing. Some of the best traders in the world trade the ES, and they know how to take advantage of the noobs.

[Carach]

My broker allows 500/contract with a 2500 opening bal in the acct and it can drop lower once its opened. If you drop to 1000 overnite you get shut off. They also use an auto shutoff intraday if you lose a certain dollar amt or % of the acct intraday. They monitor because they dont want you to go negative and owe them money--which can really almost never happen if you use stops.
You need to close out by 415pm EST.
It costs 6.30 per contract round trip incl exchange fees which I think are an additional cost on that Think or Swim price.
Shop around.
My broker also offers a great chart platform -- Sierracharts for just a few dollars/mo and no platform fee.