Does the Emini S&P 500 ever expire? If it keeps rolling over, I can hold onto the contract indefinitely? Is all I have to worry about is the huge leverage and maintain my margin correct?
Wrong. "It" does not automatically roll-over. YOU initiate the roll-over, which is a closing trade and an opening trade, which also incur commissions and fees. Failure on your part, would likely cause additional commissions and fees, as your broker will do whatever is necessary to ensure proper settlement of the underlying, or flattening the expiring contract. To avoid quarterly roll-over, you can open a position in a longer dated contract, the furthest out being as of right now, Dec 2016. Be mindful of volume in the out months.
What exactly happens if a index futures contract expires it just stops trading and everything settles all debts and credit are set to each participants accounts? Similar to how they are adjusted daily? So the only thing that changes from the normal day is the contract stops trading and all cash is settled? Also is there even a strike price like options? Or are index futures basically like stocks where price is set by supply and demand, but are highly leveraged and settle on expiration? Sorry I've literally spent hours searching, but the details on futures aren't really clear.
Everything is cash settled at expiration. The details are on cmegroup.com. Find the emini sp, click contract specifications, then settlement procedures. I doubt very many contacts ever get held until settlement but I'm not 100% sure on that. If you want to express a long term view, you can just buy/sell the front month (currently Dec 15 contact) and when the roll occurs cover your current position by buying or selling and immediately take the same position in march-16 ES.
http://www.cmegroup.com/trading/equity-index/rolldates.htmlhtml Here is a good article concerning rolls.
The other thing to remember is that futures - as derivatives - are simply proxies for something that is real. In this case, ES/SPX is a "purchasable" product that represents the 500 equities in the S&P and the futures contract is always tied to the S&P 500 value. These days, with about 3 months remaining it's about 6-8 points under the index and then slowly moves toward parity at expiration as the time dwindles. The spread is based on the risk free rate at the time. When you own ES/SP futures the cash component in your account moves with contract as they change value. Equity index futures are always (eventually) cash settled. With agricultural products - like corn, if you let them expire in the money you may get a call Saturday morning asking where you want your rail cars of corn to be delivered. That's how this whole (derivative) thing started, with farmers and suppliers that needed the security of known prices for later in the season.
Thank you, Ktm I think I finally understand futures. It is a lot less complicated than options, now I just need to find a profitable strategy.