Basically Futures

STAGE 1 · LESSON 3 OF 5

Micros, minis, and choosing an instrument

Smaller contracts change risk per tick; they do not make leverage harmless.

THE IDEA~8–12 MINUTES

Understand it

Micro equity-index futures generally represent one-tenth the exposure of their corresponding E-mini contracts. They can allow finer sizing when an E-mini would exceed a proposed risk budget. But small dollar tick values can still accumulate rapidly, and broker fees, liquidity, spreads, and slippage matter. Instruments also differ by session behavior and news sensitivity.

WORKED EXAMPLE

Ten MES contracts have approximately the same index exposure as one ES contract. That does not mean trading ten micros costs the same: aggregate fees and market conditions can differ.

Watch for this misconception

Equating a lower initial margin with a safer maximum loss. Margin is a requirement to hold exposure, not a stop-loss guarantee.

PRACTICE EXERCISE

Compare risk from one ES and three MES contracts over a hypothetical 12-point adverse move.

Position-size calculator ↗
KNOWLEDGE CHECK

What is the main sizing advantage of a micro contract?

Select the best answer

Check the sources

Hypothetical educational examples. Verify current product specifications and rules before making decisions.