E-mini Russell 2000 futures

 
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The Russell 2000 e-mini futures are futures contracts on the Russell 2000 index. Effectively, they are a way to invest in the Russell 2000. These contracts traded on the Chicago Mercantile Exchange.

The notional value of each contract is US$100 times the value of the Russell 2000 stock index, which means that an investor holding one of these contract will profit (or lose) $100 for every 1 point change on the Russell 2000 index. When the Russell 2000 is at 450, each of these contracts is worth $100*450 = $45,000. An investor does not have to pay the entire amount to hold these contracts; CME guidelines suggest that an investor needs anywhere between 5%-20% as collateral for these contracts.[1]

Unlike ETFs, such as SPDR funds, the e-mini futures are not backed by stocks. Hence an investor does not get the dividends on the underlying stocks. Instead, these contracts are backed by a counter-party who takes the opposite position on these futures.


References

  1. Chicago Mercantile Exchange, retrieved November 14, 2008
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