What are futures and how do futures contracts work?

Futures are standardized contracts to buy or sell an asset (a stock index, crude oil, gold or a currency) at a price agreed today for a future expiration date, traded on a regulated exchange such as CME Group. Day traders don’t wait for expiration: they buy and sell the contract to capture price moves, with a fixed dollar value per point. Here you’ll see how a contract works under the hood, how much each move is worth on the most traded contracts and how to start learning.

What are futures, and what is a futures contract?

A futures contract is an obligation between two parties: the buyer agrees to receive the asset and the seller to deliver it, on a date and at a price set today. What sets it apart from a private agreement (a forward contract) is that everything is standardized by the exchange: quantity, quality, dates and settlement method. The parties only negotiate the price.

On top of that, the clearing house stands between buyer and seller and guarantees performance: you never depend on an individual counterparty paying up.

Hedgers (producers, oil companies, funds) use futures to lock in prices; speculators, including day traders, aim to profit from price changes and provide liquidity.

A brief history: from Chicago grain to micros

The Chicago Board of Trade (CBOT) was founded in 1848, when the railroad turned the city into the hub of the grain trade. At first, forward contracts were traded; in 1865 the CBOT introduced standardized, centrally cleared contracts, the origin of today’s futures. In 1919 the Chicago Butter and Egg Board was renamed the Chicago Mercantile Exchange (CME). Today both are part of CME Group, which in May 2019 launched the Micro E-mini contracts, ten times smaller.

How futures contracts work: the components

Before trading any contract, read its contract specs on the exchange’s website. These are the elements that matter:

• Underlying asset: what the contract tracks. ES follows the S&P 500; CL, WTI crude oil; 6E, the euro/dollar exchange rate.
• Size or multiplier: how many dollars one index point is worth, or how many units of the asset it represents. ES is worth $50 × the index; CL equals 1,000 barrels.
• Tick: the minimum price move. On ES it’s 0.25 points; on CL, $0.01 per barrel.
• Tick value: tick × multiplier. On ES, 0.25 × 50 = $12.50 per contract. This is the number that defines your risk.
• Expiration: US index futures expire quarterly (March, June, September and December), and the last trading day is the third Friday of the month.
• Settlement: it can be cash (the difference is paid in cash, as with indices and Micro WTI) or physical (the asset is delivered, as with standard CL).

How to read a contract symbol: ESZ6, MNQH7

Every contract has a three-part symbol: product + month code + year. CME Group uses these month codes:

Month	Code	Month	Code
January	F	July	N
February	G	August	Q
March	H	September	U
April	J	October	V
May	K	November	X
June	M	December	Z

So ESZ6 is the December 2026 E-mini S&P 500 and MNQH7 the March 2027 Micro Nasdaq-100. Picking the wrong month in the platform is a classic beginner mistake.

Margin and mark-to-market: the money behind each contract

To open a position you don’t pay the contract’s full value, just a good-faith deposit called margin. CME Clearing sets two levels: initial margin, required to open, and maintenance margin, the minimum balance you must keep. If your account drops below maintenance, you get a margin call and, if you don’t add funds, the broker can liquidate the position.

Margin creates leverage. If the S&P 500 is at 6,000 points, one ES controls 6,000 × $50 = $300,000 of exposure, and one MES, $30,000. With 5% margin, a 5% drop in the index wipes out the entire deposit.

The second mechanism is daily mark-to-market: every day the exchange publishes an official settlement price, and accounts that lost pay the accounts that gained. On the E-mini S&P 500, that price is the volume-weighted average of trades between 3:14:30 and 3:15:00 p.m. Chicago time.

The most traded futures contracts and their tick values

The contracts retail and funded traders use most, with their micro versions:

Market	Standard / mini	Tick and value	Micro	Tick and value
S&P 500	ES ($50 × index)	0.25 pts = $12.50	MES ($5 × index)	0.25 pts = $1.25
Nasdaq-100	NQ ($20 × index)	0.25 pts = $5.00	MNQ ($2 × index)	0.25 pts = $0.50
Dow Jones	YM ($5 × index)	1 pt = $5.00	MYM ($0.50 × index)	1 pt = $0.50
Russell 2000	RTY ($50 × index)	0.10 pts = $5.00	M2K ($5 × index)	0.10 pts = $0.50
WTI crude oil	CL (1,000 barrels)	$0.01 = $10.00	MCL (100 barrels)	$0.01 = $1.00
Gold	GC (100 troy ounces)	$0.10 = $10.00	MGC (10 troy ounces)	$0.10 = $1.00
Euro/dollar	6E (125,000 euros)	0.00005 = $6.25	M6E (12,500 euros)	0.0001 = $1.25

MES and MNQ are the most popular micros to learn on: deep liquidity and manageable risk per point. If you’re coming from currencies, forex vs futures compares pips with ticks and the costs of each market.

Expiration and rollover: when to switch contracts

Because every contract expires, volume moves to the next one before the final date. That switch is called the rollover. For US indices, CME Group uses the Monday before the third Friday of the expiration month as the usual roll date. For the current cycle:

• December 2026 (Z6): expires December 18, 2026; roll date December 14, 2026. From that day on, trade March (H7).
• March 2027 (H7): expires March 19, 2027; roll date March 15, 2027.

After the roll, the old contract loses liquidity. Crude oil (CL and MCL) expires every month, and Micro WTI expires one day before standard CL, so the calendar is more demanding.

Futures trading hours on CME Globex

Index, energy and metals futures trade almost 24 hours on the CME Globex electronic platform: Sunday to Friday, 6:00 p.m. to 5:00 p.m. New York time, with a daily break from 5:00 to 6:00 p.m. Most index volume is concentrated in the Wall Street session (9:30 a.m. to 4:00 p.m.) and around the 8:30 a.m. macro data releases.

The equivalent in your time zone shifts with US daylight saving time. In November, for example, the 9:30 a.m. New York open is 14:30 UTC, 2:30 p.m. in London and 8:00 p.m. in India. You’ll find the detail by market in futures market hours.

How you trade a futures contract in practice

A day trader’s daily workflow looks like this:

1. Choose your platform: the most popular for futures are Tradovate (cloud-based, from any device), NinjaTrader (desktop, with ATM strategies) and TradingView connected to a broker.
2. Open the chart for the front-month contract (for example, MNQZ6) and define your scenario: where you get in, where you’re wrong and where you take profit.
3. Use the DOM (Depth of Market), the vertical price ladder showing resting buy and sell orders at each level. It lets you place or move orders with one click.
4. Enter with a bracket order: an entry order that, once filled, automatically places a linked stop loss and take profit (if one fills, the other is canceled). In NinjaTrader you set it up as an ATM strategy; in Tradovate, as a default bracket.
5. Manage and close the position according to your plan, before the end of your session.

Worked example: one trade on MES and one on MNQ

Say you want to risk no more than $40 per trade, with a 1:2 risk/reward ratio. Prices are illustrative and exclude commissions.

Item	MES ($5 per point)	MNQ ($2 per point)
Entry (buy 1 contract)	6,000.00	21,000.00
Stop loss	5,992.00 (8 points = 32 ticks)	20,980.00 (20 points = 80 ticks)
Risk	8 × $5 = $40	20 × $2 = $40
Take profit	6,016.00 (16 points)	21,040.00 (40 points)
Profit if target is hit	16 × $5 = $80	40 × $2 = $80

The dollar risk is the same, but MNQ needs a 20-point stop and MES an 8-point one, because the Nasdaq moves more. With ES or NQ at the same distances you’d risk $400: ten times as much.

Applied to a risk rule: if your daily loss limit is $350, a $40 stop leaves room for several mistakes; with 3 contracts ($120 per trade), three stops in a row already exceed the limit.

Futures trading for beginners: how to learn to trade futures

1. Master the specs: memorize the tick value of the two or three contracts you’ll trade and the expiration calendar.
2. Practice in simulation: trade a single market (MES or MNQ) for several weeks, always with a stop in place.
3. Keep a journal: log entry, stop, target, result and reason for every trade.
4. Write down your risk rules: max loss per trade, per day and max number of trades.
5. Move to a funded account: instead of posting margin with a broker, you trade a simulated account with daily loss and drawdown rules. Your maximum risk is the price of the account. We explain how they work in futures funding challenges and how to pass them in how to pass a futures evaluation.

Micro and mini futures with Emerge Profit

At Emerge Profit, futures accounts are simulated trading accounts traded on Tradovate, NinjaTrader or TradingView, with the platform license included. There are two paths:

• Futures Evaluation (from $60): EOD drawdown, 5 minimum days and no activation fee. The MICRO account has an $850 profit target, $350 daily loss limit, $800 drawdown and up to 5 micros, ideal for practicing on MES or MNQ. Positions are closed before the end of each session.
• Futures Instant Funding (from $130): no evaluation phase, 5K to 250K accounts, EOD or static drawdown and news trading allowed.

Keep the Operational Consistency and Position Sizing Rule in mind: abrupt changes in size, such as jumping from micros to minis without a transition, are not allowed.

Futures contracts: FAQ

Sources

• CME Group – Midwest Grain Trade: History of Futures Exchanges (accessed November 2026).
• CME Group – What are Trading Codes? (month codes; accessed November 2026).
• CME Group – Margin: Know What’s Needed (accessed November 2026).
• CME Group – Mark to Market (accessed November 2026).
• CME Group – FAQ: Micro E-mini Equity Index Futures (multipliers, ticks, hours and settlement).
• CME Group – Equity Index Roll Dates (December 2026 and March 2027 roll dates).
• CME Group – Micro WTI Crude Oil Futures Fact Card (MCL and CL).
• CME Group – Micro Gold and Micro Silver Futures Overview (MGC and GC).
• CME Group – Micro FX Futures Overview (M6E and 6E).

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