Emini position trading involves trading emini futures contracts in accordance with the basic trading methodology that has been around for a long, long time: going long or selling short. That is you, take up either a long or a short position.

When going long with emini position trading, you buy an e-mini under the assumption that the underlying asset, or the index, is soon going to rise in value. On the flip side of the gold coin, when you take a short position, you assume that the underlying asset or index of your purchased emini is soon going to lose value.

The reason that you would take a long position is so that you can close your position when sufficient gains have been made by taking profits. When you take up a short position, you plan on exercising the right to sell off the underlying assets at a certain point that you believe is not yet the bottom of the value-losing trend, so that the difference gets credited to your account and, once again, you make money.

In other words, emini position trading simply means using e-mini futures contracts, with their advantage of liquidity, low margin requirements, and round-the-clock trading, the way that options traders use options. You would thus purchase an emini futures contract with a call option if you expect the price of your underlying asset or index to rise in value. You would purchase an emini put option if you are anticipating a decline in value. A “call” gives you the right, but without the obligation, to buy the asset at a pre-agreed upon price within a specified time. A “put” option gives you the right, but without the obligation, to sell at a pre-agreed upon price within a specified time.

In order to be allowed to buy (or sell) the asset (or index), it must reach at least a certain price which is called the “strike price” or “exercise price”, and the difference between it and the current asset or index value is one of the determining factors in setting the premium that you must pay to buy the futures contract. Therefore, you’ll have to become good at accurately anticipating the minimum of how far up or down an underlying asset’s value is going to go when you are buying your futures contract. This is crucial to being able to make money and minimize risk with emini position trading. Happy trading!

Related Articles:

Emini Trading
E-Mini Swing Trading
Emini Trend Trading and It’s Flaws