JMI Brokers offers trading in the most traded stock indices world wide The Dow Jones index, E-mini S&P 500 and E-mini NASDAQ 100.Get benefit from trading equity indexes futures products as these indexes cover the small-, medium- and large-cap companies in the U. S.
The principle of buying and selling for future delivery has characterized the markets for over a century and a half in physical commodities, mainly metals and staple foodstuffs. It has also been the feature of the foreign exchange markets, where prices can be agreed today for foreign currencies and other financial instruments that can be delivered in the future.
Futures Markets are markets in which participants can fix the price they will pay or receive for bonds, shares and currencies and other financial products, in the future (effectively the parties thus "lock into" a known exchange rate/price).
Trading is made by buying or selling futures contracts which are standardized according to the quality, quantity, delivery time and location for each instrument. A futures contract is specified with the month during which the delivery or settlement is to occur i.e. if the product is gold and delivery is in July then the price quoted is for July Gold.
There are three types of participants in futures markets, the one that wants physical delivery, the hedger who wishes to protect himself/herself against adverse movements in prices and the speculative investor.
The speculative investor has no intention of making or taking delivery of the commodity but, rather, seeks to profit from a change in the price. Investors buy a product when they anticipate rising prices i.e. entering long (and sell that product later, at the higher price), or sell a product when they anticipate declining prices i.e. entering short (and then buy that product later, at the lower price).
If you speculate in futures contracts and the price moves in the direction you anticipated, then you will be making profit. Conversely, if prices move in the opposite direction then losses are made. Speculators therefore are individuals and corporations who seek to profit from anticipated increases or decreases in futures prices.
For those individuals who fully understand and can afford the risks that are involved, the allocation of some portion of their capital to futures trading can provide a means of achieving greater diversification and a potentially higher overall rate of return on their investments. Benefits of trading Stock Indices
Have the ability to invest in the US Market and get advantages of the global market exposure.
Investing into indices with very little capital and benefit from all market movements.
(Tick value * 5.5) /minimum fluctuation = (12.5 *5.5) / 0.25 = 275 * 3 (No. of lots) = 825
So the gross profit for this trade is 825 $
Example 2: Buying E-mini NASDAQ 100 Future Contract:
A client believes that the E-mini NASDAQ 100 index will rise; market now is 1912.00 / 1912.50. The client buys 4 lots at 1912.50. As expected the index rises and now its 1925.75/1926 .The client decides to sell 4 lots (close his positions) at 1925.75. to calculate his profit we should do the following :
(Tick value * 13.25) /minimum fluctuation = (5 *13.25) / 0.25 = 265*4 (No. of lots) = 1060
So the gross profit for this trade is 1060 $
Example 3: Selling Dow Jones index Future Contract:
A client believes that the Dow Jones index will fall; market now is 13440 / 13442. The client sells 3 lots at 13440. Unfortunately the index rises and now its 13510 / 13511.The client decides to buy 3 lots (close his positions) at 13511. To calculate his loss we should do the following: