New ES Micro Contract

    Posted by matt on 6th of Aug 2019 at 04:14 pm

    Everyone here is well aware of the ES mini futures contract. it controls currently $143,950 for one contract and moves $50 for one point, so a 100 point move in ES would be $5000, highly leveraged. 

    However there's now a micro ES contract symbol MES. It controls exactly 1/10 of the regular ES, so $14,395 or moves $5 for every point. For those who didn't like the leverage of the ES, the micro MES might be something to consider as it's much easier to stomach draw downs.

    futures of course have benefit of the 60/40 tax rule with 60% of the gains being taxed as long term cap gains, vs stocks and options that have to be held for a year to get that special tax benefit. 

    I've traded this contract the last couple days, it's very liquid.

    anyway figured I'd share in case you were not aware of it. I think it's a good option over ES because even if you had plenty of capital, it allows you to scale out: For example if you were comfortable buying one ES contract, you could buy 10 MES contracts representing the same value and scale out of them a couple at a time on a move, you have 10 scale outs you could do, whereas with 1 ES contracts you can only sell it once and you are out! For 2 ES contracts you would have 20 MES

    Great  information Matt, if you

    Posted by ssaffer on 6th of Aug 2019 at 06:52 pm

    Great  information Matt, if you haven't already perhaps you can include the MES into the trading system portfolio.

    I don't think they do. anyway

    Posted by matt on 6th of Aug 2019 at 07:03 pm

    I don't think they do.

    anyway for example because I am quite a few SPY options, I hedged by shorting MES contracts just after the cash market close. as I'm a bit worried about a pullback. Of course I can cover any time after hrs or late evening if I have to. stop is at 2884 on the contracts

    ES down about 18, glad

    Posted by matt on 6th of Aug 2019 at 10:31 pm

    ES down about 18, glad I took that hedge short using the futures. However for me now is always the hard part, do I just leave it and go to bed in case they continue to fall, or cover for a profit now in case they came back up while I'll sleep.  

    Thanks Matt. Is there something

    Posted by coolhat on 6th of Aug 2019 at 05:46 pm

    Thanks Matt. Is there something similar on Nasdaq futures?

    Awesome info and suggestion!  Thanks

    Posted by goap1207 on 6th of Aug 2019 at 05:12 pm

    Awesome info and suggestion!  Thanks Matt.  I will switch to MES.  

    Thanks for the info, Matt.

    Posted by stevieb294 on 6th of Aug 2019 at 04:20 pm

    Thanks for the info, Matt. Very interesting!

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