Cost of e-mini contract - why does it not vary?

Discussion in 'Index Futures' started by carbtrader, Dec 26, 2006.

  1. I'm a newbie to trading futures coming from the stocks world :)

    With stocks as the price goes higher it becomes more expensive to buy something and vice versa. It doesn't seem to be the same with futures? ie. does purchasing a Russell 2000 E-Mini contract (ERT) *always* cost $500? If the Russell index rises a number of points later in the day wouldn't it cost more per contract, or am I missing something?

    Thanks for any clarification or pointers to where I can find information about how this works!
  2. mDrake


    Futures are margined based on variances -- not absolute levels.
  3. I know it's semantics but index futures are held through a performance bond, not a margin, although many brokers call it margin. And margin varies from $300 with global futures to approx. $1000 with IB. Most are $500 though.
  4. mDrake


    Why limit it to indices? How about beans?
  5. Ah ok thxs I get it now. I was sort of under the impression that we were buying something, but we're not buying anything it's just a "performance bond" that allows us to control a larger amount of money.
  6. Anytime you trade futures you are trading under a performance bond/aka margin.