Introduction
If you are interested in trading futures, then you may have heard of E mini contracts. These contracts are smaller versions of the standard futures contracts and are traded electronically. One of the questions that many traders have is when do E mini contracts expire? In this article, we will discuss the expiration dates of E mini contracts and how they can impact your trading strategy.
Understanding E Mini Contracts
Before we dive into the expiration dates of E mini contracts, let’s first understand what they are. E mini contracts are futures contracts that represent a fraction of the value of the standard futures contract. This makes them more accessible for traders who want to get involved in futures trading but do not have the capital to trade the standard contract.
Types of E Mini Contracts
There are several types of E mini contracts available for trading, including the E mini S&P 500, E mini Nasdaq, E mini Dow Jones, and E mini Russell 2000. Each contract represents a different index or group of stocks and has its own expiration date.
Expiration Dates
E mini contracts have quarterly expiration dates, which occur in March, June, September, and December. The specific expiration date depends on the contract type. For example, the E mini S&P 500 contract expires on the third Friday of the expiration month.
Rolling Over Contracts
Traders who hold E mini contracts until expiration must either roll over their position to the next contract or close out their position. Rolling over a contract involves selling the current contract and buying the next contract with a later expiration date. This allows traders to maintain their position in the market without having to close out their position and potentially miss out on profits.
Impact on Trading Strategy
The expiration dates of E mini contracts can impact a trader’s trading strategy. For example, if a trader is holding a long position in an E mini contract that is about to expire, they may want to roll over their position to the next contract to avoid having to close out their position. Alternatively, if a trader has a short position in an E mini contract that is about to expire, they may want to close out their position to avoid potential losses.
Factors to Consider
When deciding whether to roll over a contract or close out a position, traders should consider several factors. These include the price of the next contract, the cost of rolling over the contract, and the potential for profits or losses in the market.
Price of Next Contract
The price of the next contract is an important factor to consider when rolling over a position. Traders should compare the price of the next contract to the current contract to determine whether it is worth rolling over their position.
Cost of Rolling Over Contract
There is a cost associated with rolling over a contract, which includes the commission charged by the broker and any additional fees. Traders should factor in these costs when deciding whether to roll over their position.
Potential for Profits or Losses
Traders should also consider the potential for profits or losses in the market when deciding whether to roll over a contract or close out their position. If the market is trending in their favor, then rolling over the contract may be the best option. However, if the market is volatile or unpredictable, then closing out their position may be the safer option.
Conclusion
In conclusion, E mini contracts expire quarterly, and the specific expiration date depends on the contract type. Traders who hold E mini contracts until expiration must either roll over their position to the next contract or close out their position. The expiration dates of E mini contracts can impact a trader’s trading strategy, and several factors should be considered when deciding whether to roll over a contract or close out a position. As with any trading strategy, it is important to do your research and make informed decisions based on market conditions and your individual trading goals.
