what is actual cost of 1 6E contract?

Discussion in 'Financial Futures' started by pattyloo, Jul 4, 2011.

  1. pattyloo

    pattyloo

    i'm confused by the pricing. It's like 1.3296/contract. In options, I would multiply that by 100 to get $132.96 actual cost/contract.

    But, I don't understand the multiplier for these futures contracts.

    Furthermore, I'm told I only need a $500 account balance to trade them, which I know means I'm getting margin for day-trading. But, I'd like to know how much I'm 'borrowing' on margin.

    Thanks, and sorry for the newbie question. I've googled this and can't seem to find an answer.
     
  2. pattyloo

    pattyloo

    thanks for the link. i had found that myself, but being new to futures, i still don't understand what 1 ES contract costs in actual dollars. i know the price changes tick-by-tick. but, it must be some multiple of the price quoted, right? i see that a contract is 125,000 euros. does this mean the cost of 1 contract = 125,000 euros?

    i'm coming from an options background, where we pay for intrinsic value plus time value, which is much cheaper than buying the stock. but by using options, we can control the shares just as if we owned them.

    i'm assuming it is similar for futures, but i just don't understand it yet.

    i'd prefer not to go on margin at all, and with options, i have stayed away from margin. but, it sounds like 1 ES contract may be more expensive than i could afford without margin.
     
  3. pattyloo

    pattyloo

    I understand pricing on ES is about $1300/contract. i'm confused about the 6E series. Sorry if I said ES instead of 6E in my question.
     
  4. sle

    sle

    Are you sure? It's $50 x E-mini S&P 500 futures price, so the contract size/notional is actually about 65k.
     
  5. pattyloo

    pattyloo

    thanks for that info on the es. i did think it was 1300/contract. didn't know about multiplying that by 50. do you know the cost of the 6E?
     
  6. MTE

    MTE

    Just multiply the price by 125,000 to get the contract notional value. At 1.3296 it is $166,200.
     
  7. moarla

    moarla

    dont confuse margin with contract value.

    1 6E contract is the equivalent of 125,000 USD or 125,000/1.4510= 86,147 EUR


    then 500 USD is the margin, that you need to have in your account to buy 1 contract. that is not a price. on other brokers you need to have 2500 USD for the same contract. that is only a deposit.

    1 ES contract has the value of 50 x (actual price) = around 65,000 USD
    the margin (u call it the price) is from 500 to 3000, depending on vroker
     
  8. MTE

    MTE

    1 6E contract is 125,000 EUR not USD. So at 1.4510 it is 125,000 EUR or 181,375 USD.
     
  9. moarla

    moarla

    No

    Contract Specifications

    The full contract specifications for the EUR futures market are as follows :

    Symbol (IB / Sierra Chart Format) : 6E (EUR)
    Expiration date (as of February 2011) : March 14th 2011 (the second trading day before the third Wednesday of every third month)
    Exchange : GLOBEX
    Currency : USD
    Multiplier / Contract value : $125,000
    Tick size / Minimum price change : 0.0001
    Tick value / Minimum price value : $12.50


    >> you see contract value? 125.000 USD
     
    #10     Jul 5, 2011