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CME Group Unveils Options on Micro E-mini Equity Indices

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CME Group Inc. (CME - Free Report) unveiled options on its Micro E-mini S&P 500 and Micro E-mini Nasdaq-100 futures contracts and made them available for trading.

E-mini S&P 500 futures and options are based on the underlying Standard & Poor’s 500 stock index. These electronically traded futures contracts are one fifth the size of standard S&P futures. E-mini Nasdaq-100 futures contract is $20X the Nasdaq-100 index and has a minimum tick of 0.25 index points. It offers liquid benchmark contracts to manage exposure to the 100 leading non-financial U.S. large-cap companies that make up the Nasdaq-100. Both E-mini S&P 500 and E-mini Nasdaq-100 futures and options of CME Group are among the most actively traded equity index products in the world.

The new options on futures on these two indices, Micro E-mini S&P 500 and Micro E-mini Nasdaq-100 futures, are 1/10th the size of their E-mini options counterparts. Their listing cycle comprises five Friday weekly options, three end-of-month options, and two quarterly options contracts.

CME Group launched options on Micro E-mini futures on the S&P 500 and Nasdaq-100 indices by leveraging the strength and liquidity of Micro E-mini futures. These are expected to offer more flexibility even in the current economic uncertainty.

Micro E-mini Equity futures, launched in May 2019, have become the most successful new products since their launch. So far this year, 30% of Micro E-Mini S&P 500 and Micro E-Mini Nasdaq-100 futures trading volume has originated outside of the United States. For Micro E-mini S&P 500 and Micro E-mini Nasdaq-100, 186 million and 131 million cumulative futures contracts were traded, respectively. More than 93,000 unique accounts have traded both futures contracts.

CME Group is a global company and its customers include financial institutions, individual and institutional investors. As part of its strategic initiatives, the company launches options to diversify business and revenues, and deliver unparalleled customer efficiencies and operational excellence. The launch of options enables it to continue to develop into a more broadly diversified financial exchange that provides trading and clearing solutions across a wide range of products and asset classes.

Futures contracts and options contracts provide investors with vehicles for protecting against, and potentially profiting from price changes in financial instruments and physical commodities.

In January 2020, CME Group launched bitcoin options and options on SOFR.

In the first half of 2020, average daily contract volume included approximately 1.7 million in Micro-E-mini equity index contracts. Average daily contract volume for E-mini S&P 500 futures and options increased 80% and the same for E-mini NASDAQ 100 futures and options surged 143% year over year.

Shares of this largest futures exchange in the world in terms of trading volume as well as notional value traded has declined 19.1% in the past year against the industry’s increase of 1.3%. Nonetheless, the company’s policy to ramp up its growth profile and capital position should continue to drive shares higher.


The stock carries Zacks Rank #5 (Strong Sell).

Stocks to Consider

Some better-ranked stocks from the finance sector include MarketAxess Holdings Inc. (MKTX - Free Report) , OTC Markets Group Inc. (OTCM - Free Report) and Equitable Holdings, Inc. (EQH - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

MarketAxess operates an electronic trading platform that enables fixed-income market participants to trade corporate bonds and other types of fixed-income instruments worldwide. It surpassed estimates in each of the last four quarters, with the average earnings surprise being 2.49%.

OTC Markets engages in the financial market business in the United States and internationally. It surpassed estimates in three of the last four quarters, with the average earnings beat being 10.54%.

Equitable Holdings operates as a diversified financial services company worldwide. It surpassed estimates in three of the last four quarters, with the average earnings beat being 13.79%.

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