An index future is a contract on the value of a stock index at a later date. Each contract has a multiplier: a dollar amount per index point. The multiplier decides how much one tick of price movement is worth, and that is the number every stop, target and position size is built from.
CME Group launched Micro E-mini index futures in 2019 at one tenth the size of the E-mini contracts. The specs below are the exchange's published contract terms. Confirm them on CME Group's own product pages before you use them, since exchanges can change terms.
05.1MES: Micro E-mini S&P 500
MES is $5 times the S&P 500 index. The minimum tick is 0.25 index points, so one tick is worth $1.25 and one full point is worth $5. It is one tenth of the E-mini S&P 500 (ES), which is $50 per point.
05.2MNQ and NQ: Nasdaq-100
NQ, the E-mini Nasdaq-100, is $20 times the index, with a 0.25-point tick worth $5. MNQ, the micro, is $2 times the index, with the same 0.25-point tick worth $0.50. The Nasdaq-100 usually moves more points per day than the S&P 500, so the same number of contracts can carry noticeably more risk.
05.3YM: E-mini Dow
YM is $5 times the Dow Jones Industrial Average, and it ticks in whole points: one tick is 1.0 point and is worth $5. The micro version, MYM, is $0.50 per point.
05.4Contract months and trading hours
Equity index futures list quarterly contracts: March, June, September and December, with the month codes H, M, U and Z. Traders roll to the next contract before expiration. On CME Globex they trade Sunday to Friday from 6:00 p.m. to 5:00 p.m. Eastern Time, with a daily break from 5:00 to 6:00 p.m. Liquidity is usually deepest during U.S. cash market hours.
05.5Working out a position's size
Multiply the distance to your stop in ticks by the tick value, then by the number of contracts. A 20-tick stop on one MES contract puts $25 at risk before slippage and commission. On one NQ contract the same 20 ticks is $100. Do that arithmetic before every trade, not after.
risk = stop_ticks × tick_value × contracts
MES : 20 × 1.25 × 1 = 25.00
NQ : 20 × 5.00 × 1 = 100.00 // before slippage and feesWhere it usually goes wrong
- Sizing a Nasdaq-100 position like an S&P 500 position.
- Forgetting the roll and trading a thin, expiring contract.
- Testing on cash-session hours and trading the overnight session, or the reverse.