What is a futures contract?
A futures contract is a standardized agreement to buy or sell something at a set price on a set date in the future. The "something" can be a stock index, crude oil, gold, interest rates, or currencies. Every contract on the exchange has the same size, tick size, and expiration rules, which is why they're easy to compare and trade.
Most futures day traders never take or deliver anything. They open a position and close it the same day, and their profit or loss is the difference between the two prices. Index futures like the E-mini S&P 500 are also cash-settled, so there's no physical delivery even if you held one to expiration.
A trader buys 1 Micro E-mini S&P 500 (MES) contract at 5,840.00 in a simulator and sells it at 5,844.00. That's a 4-point move. Each MES point is worth $5, so the simulated result is a $20 gain before fees. If price had fallen 4 points instead, it would have been a $20 loss.
Futures trade on regulated exchanges. In the US, the most popular index futures trade on the CME Group's electronic platform, CME Globex, and the market is overseen by the Commodity Futures Trading Commission (CFTC).
Why traders learn futures
Nearly around-the-clock hours
Index futures trade from Sunday evening to Friday afternoon (US Eastern), so you can practice before work or in the evening.
One centralized market
Every order for a contract goes to the same exchange, so everyone sees the same prices and volume.
Small, standardized contracts
Micro contracts are one-tenth the size of the E-minis, which makes the numbers easier for beginners to follow.
A few markets to master
Many traders focus on just one or two contracts, such as ES and NQ, instead of scanning thousands of stocks.
E-mini vs micro futures: ES, MES, NQ, MNQ
The two most popular index futures are the E-mini S&P 500 (ES), which tracks the 500 large US companies in the S&P 500, and the E-mini Nasdaq-100 (NQ), which tracks 100 of the largest Nasdaq-listed companies. Each has a micro version that is exactly one-tenth the size.
| Contract | Symbol | Value per point | Tick size | Value per tick |
|---|---|---|---|---|
| E-mini S&P 500 | ES | $50.00 | 0.25 | $12.50 |
| Micro E-mini S&P 500 | MES | $5.00 | 0.25 | $1.25 |
| E-mini Nasdaq-100 | NQ | $20.00 | 0.25 | $5.00 |
| Micro E-mini Nasdaq-100 | MNQ | $2.00 | 0.25 | $0.50 |
Which should a beginner learn first?
Most beginners learn on micro contracts in a simulator. The price chart is identical to the E-mini, so every lesson carries over, but each move is worth one-tenth as much. NQ and MNQ usually move more points per day than ES and MES, so many new traders find the S&P contracts calmer to learn on.
Tick size and tick value, explained
A tick is the smallest price move a contract can make. For ES, MES, NQ, and MNQ, one tick is 0.25 points, so there are 4 ticks in every point. The tick value is how much money one tick is worth per contract.
The formula is simple: dollar change = ticks moved × tick value × contracts. Try it below.
Futures tick value calculator
Free toolBefore commissions and fees. For education only.
Futures trading hours
US equity index futures (ES, MES, NQ, MNQ) trade on CME Globex almost 23 hours a day, five days a week. All times below are US Eastern Time (ET).
| Period | Time (ET) | What it means |
|---|---|---|
| Weekly open | Sun 6:00 PM | Trading starts for the week. |
| Daily break | Mon–Thu 5:00–6:00 PM | A one-hour pause each evening. |
| US cash session | Mon–Fri 9:30 AM–4:00 PM | When the stock market is open. Volume and movement are usually highest here, especially in the first hour. |
| Weekly close | Fri 5:00 PM | Trading stops for the weekend. |
Is the futures market open right now?
LiveRegular weekly schedule for CME equity index futures. Exchange holidays and early closes aren't included; check the CME holiday calendar.
Contract months, symbols, and rollover
Index futures expire four times a year. Each contract month has a one-letter code, and the full symbol adds the year. For example, ESZ26 is the E-mini S&P 500 expiring in December 2026.
| Month | March | June | September | December |
|---|---|---|---|---|
| Code | H | M | U | Z |
Equity index futures expire on the third Friday of the contract month. About a week before that, most traders roll over to the next contract because that's where the volume moves. Your platform will usually show which contract is the "front month." Always check that your chart and your order ticket are on the same contract.
Leverage and margin, explained
Margin in futures is a good-faith deposit, not a loan. The exchange sets an initial margin to open a position overnight and a maintenance margin you must keep above. Many brokers also set lower day-trading margins for positions closed before the end of the session. All of these amounts change, so check your broker's current requirements.
Because the deposit is small compared with the full contract value, futures are leveraged. One ES contract controls 50 times the index level. At an index level of 5,800, that's $290,000 of exposure, regardless of how much money is in the account.
Futures vs stocks for a new trader
| Index futures | Individual stocks | |
|---|---|---|
| Trading hours | Nearly 23 hours, Sun–Fri | Mainly 9:30 AM–4:00 PM ET, plus limited extended hours |
| What you study | One or two contracts | Thousands of tickers to scan |
| Pattern day trader rule | Doesn't apply (broker margin rules do) | Applies to margin accounts under $25,000 |
| Leverage | Built in; losses can exceed deposit | Optional margin; cash accounts can't lose more than invested |
| Expiration | Quarterly; roll to the next contract | None |
| Short selling | As simple as buying | Requires borrowing shares |
Neither is "better." Futures suit people who want a small number of markets and flexible hours. The trade-off is built-in leverage, which makes risk management non-negotiable.
How to size a futures position
Professional traders size positions backwards: they start with how much they're willing to lose on one trade, then work out how many contracts that allows. Many traders cap a single trade's risk at a small, fixed share of their account, and also set a daily loss limit that ends the session when it's hit.
max contracts = risk per trade ÷ (stop distance in ticks × tick value)
Futures position size calculator
Free toolExample values. Doesn't include slippage, commissions, or fees, and isn't a recommendation to trade any size.
Practice in a simulator before risking money
A futures simulator uses live market data but fake money. It's where you learn the platform, test your rules, and build a track record without the cost of beginner mistakes.
- Pick one contract. MES is the most common starting point. Learn how it moves before adding a second market.
- Pick one setup. Learn one complete pattern, with entry, stop, and exit rules, from start to finish.
- Trade the same window every day. Consistency in timing makes your results comparable.
- Journal every trade. Record the setup, whether you followed your rules, and how you felt.
- Review weekly against benchmarks. Look at rule-following first and results second. Only consider real money after a long stretch of consistent simulated results.
Your first futures trading plan
A trading plan is a short set of written rules you follow every session. If a rule isn't written down, it's easy to break under pressure. Start with these sections:
- MarketWhich contract you trade (for example, MES only).
- SessionYour trading window, such as 9:30 to 11:00 AM ET.
- SetupThe one pattern you're allowed to trade, described in plain words.
- EntryThe exact condition that gets you in.
- StopWhere you're wrong, decided before you enter.
- TargetWhere you take profit, or how you trail.
- SizeYour max risk per trade and the contract count that results.
- Daily limitThe loss, or number of losing trades, that ends your day.
- ReviewWhen you journal and when you review the week.
Common futures trading mistakes beginners make
Sizing from margin instead of risk
Just because you can open 5 contracts doesn't mean your plan allows it.
Trading without a stop
Leverage turns a "it'll come back" moment into an account-ending one.
Revenge trading after a loss
Your daily loss limit exists for this exact moment.
Jumping between markets
ES in the morning, crude oil at lunch, NQ in the afternoon means you never learn one well.
Trading the wrong contract month
Check the symbol after every rollover.
Skipping the simulator
Real money is an expensive place to learn the order ticket.
Futures trading FAQ
Is futures trading good for beginners?
It can be, if you learn on micro contracts in a simulator first and put risk management before strategy. Futures are leveraged, so beginners who skip that step often lose money quickly.
How much money do I need to start trading futures?
You need no money to start learning, because simulators are free or low-cost. To trade real money, your broker sets the minimum deposit and margin requirements, and they vary. Whatever the amount, it should be money you can afford to lose, because futures losses can exceed your deposit.
What is the difference between ES and MES?
MES is the micro version of ES and is one-tenth the size. ES is worth $50 per point ($12.50 per tick), and MES is worth $5 per point ($1.25 per tick). They follow the same index, so the charts look the same.
What hours can you trade futures?
US equity index futures trade on CME Globex from Sunday 6:00 PM ET to Friday 5:00 PM ET, with a daily break from 5:00 to 6:00 PM ET Monday through Thursday. Holiday schedules differ.
Does the pattern day trader rule apply to futures?
No. The pattern day trader rule applies to stock margin accounts. Futures accounts follow your broker's margin requirements instead.
Can you lose more than you invest in futures?
Yes. Because futures are leveraged, a fast move against your position can produce losses larger than the money in your account, and you'd owe the difference to your broker.
