A
- Ask
- The lowest price a seller is currently willing to accept. Buying at the market fills at the ask.
B
- Bid
- The highest price a buyer is currently willing to pay. Selling at the market fills at the bid.
- Bracket order
- An entry order sent together with a stop-loss and a profit target, so both exits are in place as soon as the trade fills.
C
- Cash session
- The hours when the US stock market is open, 9:30 AM to 4:00 PM ET. Index futures usually see their highest volume then.
- Cash-settled
- A contract that settles in money instead of delivery of the underlying asset. Equity index futures like ES and NQ are cash-settled.
- CME Group
- The exchange operator that lists ES, MES, NQ, MNQ and many other futures, traded electronically on CME Globex.
- Commission
- The fee your broker charges per contract, per side. It applies whether a trade wins or loses.
- Contract month
- The month a futures contract expires. Equity index futures have four: March (H), June (M), September (U) and December (Z).
D
- Daily loss limit
- A personal rule that ends your trading day once losses reach a set amount, written into your plan before the session starts.
- Day trading margin
- A reduced margin some brokers allow for positions opened and closed in the same session. It varies by broker and can change at any time.
E
- E-mini
- A smaller-sized electronic futures contract. The E-mini S&P 500 (ES) is worth $50 per index point.
- ES
- The E-mini S&P 500 futures contract. Tick size 0.25 points, worth $12.50 per tick.
- Expiration
- The date a futures contract stops trading. Equity index futures expire on the third Friday of the contract month.
F
- Fill
- The completed execution of your order at a specific price.
- Front month
- The contract month with the nearest expiration, which usually has the most volume until rollover.
- Futures contract
- A standardized agreement to buy or sell an asset at a set price on a future date. Most day traders close positions the same day instead of holding to expiration.
G
- Globex
- CME Group's electronic trading platform, where index futures trade nearly 23 hours a day.
I
- Initial margin
- The deposit the exchange requires to open a futures position held past the end of the session.
L
- Leverage
- Controlling a large contract value with a small deposit. Leverage magnifies both gains and losses, and futures losses can exceed your deposit.
- Limit order
- An order to buy or sell at a specific price or better. It may not fill if price never reaches it.
- Liquidity
- How easily you can enter and exit without moving the price. More buyers and sellers means better liquidity.
- Long
- A position that profits if price rises. You go long by buying.
M
- Maintenance margin
- The minimum account balance needed to keep a position open. Falling below it can trigger a margin call or forced liquidation.
- Margin call
- A demand from your broker to add funds when your account drops below the required margin. Brokers may also close positions automatically.
- Market order
- An order to buy or sell immediately at the best available price. It fills fast, but the price isn't guaranteed.
- MES
- The Micro E-mini S&P 500 futures contract, one-tenth the size of ES. Tick size 0.25 points, worth $1.25 per tick.
- Micro futures
- Contracts one-tenth the size of the E-minis, such as MES and MNQ. Many beginners learn on them in a simulator because each move is worth less.
- MNQ
- The Micro E-mini Nasdaq-100 futures contract, one-tenth the size of NQ. Tick size 0.25 points, worth $0.50 per tick.
N
- NQ
- The E-mini Nasdaq-100 futures contract. Tick size 0.25 points, worth $5.00 per tick.
O
- Overnight session
- Futures trading outside US stock market hours, from 6:00 PM to 9:30 AM ET. Volume is usually lighter.
P
- Point
- A one-unit move in the index price. On ES, MES, NQ and MNQ, one point equals four ticks.
- Position size
- How many contracts you trade. A sound size starts from your max risk per trade and your stop distance, not from available margin.
- Pre-Trade Prep
- MarketEye's weekly community post listing the week's key scheduled economic releases.
- Process review
- Feedback on whether you followed your own written trading plan, regardless of whether the trade won or lost.
R
- Risk per trade
- The most you are willing to lose on a single trade, set before you enter.
- Rollover
- Switching from an expiring contract to the next contract month, usually about a week before expiration, when volume moves.
S
- Short
- A position that profits if price falls. In futures you go short by selling, as simply as buying.
- Simulator
- A practice account that uses live market data and fake money, so you can learn the platform and test your plan without risking capital.
- Slippage
- The difference between the price you expected and the price you got, common in fast markets and with market and stop orders.
- Spread
- The gap between the bid and the ask.
- Stop-loss order
- An order that exits your position if price reaches a set level, limiting the loss on a trade. It can fill worse than the stop price in fast markets.
T
- Tick
- The smallest price move a futures contract can make. For ES, MES, NQ and MNQ, one tick is 0.25 points.
- Tick value
- How much one tick is worth per contract: $12.50 on ES, $1.25 on MES, $5.00 on NQ and $0.50 on MNQ.
- Trading plan
- Written rules covering your market, session, setup, entry, stop, target, size, daily limit and review routine.
V
- Volume
- How many contracts trade in a period. Higher volume usually means tighter spreads and easier fills.
Want the full picture? Read Futures Trading 101, try the tick value calculator, or check futures trading hours.
