The Russell 2000 is known for being a benchmark for the measurement of the performance of the United States equity universe’s small-cap segment. This index actually happens to be a subset of the Russell 3000 Index, which means that it represents nearly 10% of the overall market capitalization of the Russell 3000 Index. 2000 of the smallest securities on the basis of current index membership and market cap are included in the Russell 2000 Index. The ICE electronic trading platform offers Russell emini futures for trading for 22 hours a day.
Specifications Of The Russell 2000 Index Emini Futures Contract
The symbol of the Russell 2000 emini futures contract is TF and the size of the contract is several times the size of the Index. There are four contract months, namely March, June, September and December, along with a quarterly expiration cycle. The price quotation of the contract is up to two decimal places of Index point and it has a tick size of 0.10 Index points, which is the equivalent of $10 for every contract. However, it is also possible to do block and spread trades at 0.05 Index points.
The daily settlement of the Russell 2000 emini futures contract is equal to the volume-weighed price average of the total electronic trades a trader has transacted in closing session. The Friday of the expiration month happens to be last trading day of the contract and the expiring contract can no longer be traded after 9:30 a.m. ET.
Final settlement of the contract is cash settlement that is carried out to a special opening calculation of the index on the basis of the component stocks’ opening prices on the contract month’s third Friday. When trading Russell 2000 emini futures contracts, a trading halt can occur on the New York Stock Exchange, which results in a temporary halt of trading in these contracts. An Interval Price Limit (IPL) is also imposed by the ICE for its futures contracts, including the Russell 2000 emini futures contract. What this means is that the ICE does not permit prices to move over a certain predetermined amount (IPL) away from the present market price within a certain predetermined period referred to as the the Recalculation Time.
When it comes to block trading, minimum of 20 Russell 2000 emini futures contracts can be block traded. These contracts also happen to qualify for EFSs and EFPs transactions as well. In fact, these contracts also qualify for Trade at Index Close (TIC) and Trade at Settlement (TAS) too. The limits of these contracts include 50,000 one month and 50,000 combination of all months.
Once trading of some of the other emini futures contracts has been mastered, Russell emini trading can prove to be an excellent trading vehicle. In fact, once the discipline and skills of some of the other indices has been mastered, Russell 2000 emini futures trading can prove to be very lucrative. However, these futures contracts should be traded as a secondary trading vehicle to the S&P emini futures contracts because the Russell emini futures contracts tend to have a fair amount of slippage. Nonetheless, the fact that trades can make an unrealized gain when training these contracts is what makes them favorable enough.
It is important that you take adequate training before you begin trading. Here is information on education and training services on the TradeStation. Live training is always better than videos, books or other learning formats.