For the novice trader, risking thousands of dollars on a single futures or Forex trade may be more than the trader can afford to risk. The "mini" type of trading accounts or contracts allow an individual trader to get in the game with a lot less money at risk.
E-mini contracts and mini Forex accounts operate in different markets. Which is best depends on the trader's preference and size of her trading account. E-mini contracts are smaller sized futures contracts from the commodity and futures exchanges. E-mini contracts only trade over futures electronic trading systems as opposed to both floor and electronic trading for standard contracts.
The e-mini futures contracts also represent a smaller amount of the underlying instrument or commodity. For example, an e-mini Silver contract is for the delivery of 1, ounces of silver. The standard silver futures contract is for 5, ounces. You trade e-mini futures through a registered commodity futures broker. Foreign currency exchange -- Forex -- is traded through independent brokers. The standard Forex lot is , of the base currency in a traded currency pair. If you trade euros against dollars -- EUR: In a mini Forex account, the lot size is 10, currency units.
With a mini account, the required margin deposit and the amount of money a trader needs to trade is one-tenth the money of a standard Forex trading account. To trade either e-mini futures or Forex mini lots requires a trader to put up a margin deposit for each contract or lot traded.
E-mini futures margin rates are set by the commodity exchanges. The Forex trading rules allow If the base currency is U. In both e-mini and Forex mini trading it is possible to lose more than the initial margin amount, so a trader should have on deposit enough money to cover the margin for trades and some cushion. The e-mini futures products primarily trade against products that are not currency exchange trading. For Forex trading, the commodity exchanges offer e-micro contracts, which are similar in size to a mini Forex lot size.
E-micro Forex futures are exchange-traded products, while mini Forex trading is accomplished over the counter through a broker. With mini Forex trading it is easy to change from currency pair to currency pair. With the e-micro futures contracts, each currency pair will be sized a little differently. Tim Plaehn has been writing financial, investment and trading articles and blogs since His work has appeared online at Seeking Alpha, Marketwatch. Plaehn has a bachelor's degree in mathematics from the U.
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This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. These returns cover a period from and were examined and attested by Baker Tilly, an independent accounting firm. Visit performance for information about the performance numbers displayed above. Skip to main content. What Is an Intercommodity Spread? E-mini Futures E-mini contracts are smaller sized futures contracts from the commodity and futures exchanges.
Mini Forex Account Foreign currency exchange -- Forex -- is traded through independent brokers. Costs to Trade To trade either e-mini futures or Forex mini lots requires a trader to put up a margin deposit for each contract or lot traded. Forex Both Ways The e-mini futures products primarily trade against products that are not currency exchange trading. References 5 CME Group: What is Forex Trading? About the Author Tim Plaehn has been writing financial, investment and trading articles and blogs since Zacks Research is Reported On:More...