Why Trade Them?

I. CME E-Mini Stock Index Futures: Section 2 of 4

CME E-minis are cutting-edge products designed for the trader who knows the stock market, wants to trade electronically, and likes the extended trading hours these tools provide. You can use E-mini stock index futures to:

• Actively trade stock indexes
• Hedge your portfolio or other investments
• Gain broad market exposure, at relatively low cost

Equities investors like the great "tradability" of these products. Besides having tight bid/offer spreads, they are:

• Highly liquid
• Traded virtually around the clock
• Easily accessible to the online trader
• Completely electronic - no trading pits
• Sized for the individual investor
• Fast-moving, exciting and stimulating to trade
• Backed by a strong financial safeguard system

And because these E-minis are futures, they offer some unique additional features:

• The capital requirement to trade is low relative to stock margin requirements
• Returns can be quite substantial
• You have the opportunity for profitable trading strategies regardless of market direction or volatility

You can trade E-mini stock index contracts as a day trader, simply with an eye to making a profit. But you can also use them as hedging tools or to get a particular kind of market exposure. For example, you may decide to sell these contracts if you think the market will be bearish, but you don't want to disrupt your portfolio by selling off a large number of stocks. Or, you may buy them if you think the market will be bullish in the near future, but you don't want to purchase additional shares of a particular stock at that time.