Sizing Up Futures Contracts
Most traders find old school futures contracts too big for their accounts
To trade futures, begin by understanding the sizes of the products, the expected moves and whether the futures product is appropriate for the size of the account (see “Follow the table” below).
Good thing you got a guy to help determine all that—me! Take the S&P 500 as an example—two products are available: the /ES and /MES. The /ES is worth approximately $144,000 and the /MES is one-tenth the value at $14,400. The smallest account to consider trading /ES is $21,000—which is approximately 20 times the approximate average one-day move of the product.
Investors who trade with too small an account can risk forcing the closing of a position that...
