Futures trading presents opportunities for managing risks and speculating in financial markets. Among the various contract options, micro and mini futures cater to different types of traders.
Contract Size:
Mini futures contracts are typically 10% of a standard contract's size.
Micro futures represent just 1%.
Example
In the S&P 500 Index, a mini contract (E-mini) reflects $50 multiplied by the index value, and a micro contract (Micro E-mini) reflects $5 multiplied by the index value.
Margin Requirements:
Micro futures have lower margin requirements due to their smaller size, making them suitable for beginners. In contrast, mini futures require more capital because of their larger exposure.
Trading Costs:
Mini futures can incur higher trading costs due to their larger contract size, while micro futures are generally more cost-efficient. However, trading higher volumes of micro contracts can lead to comparable costs over time.
Who Trades Futures?
Mini futures attract intermediate and experienced traders seeking significant exposure, while micro futures appeal to retail traders and beginners, allowing them to gain market experience with reduced financial risk.