What are the Top Ten Liquid Futures Contracts?

Trading liquidity is also an important facet of trading futurescontract, specially if you’re a day trader. Trading has already been hard of enough undertaking, envision not becoming the fills and coping with tremendous bid/ask spreads.

As the old expression goes, there’s strength in numbers.

It normally takes a lot more income to maneuver an extremely liquid contract via a thinly traded on the counter security.

This premium liquidity supplies you the invest or instead of a safety against sharp cost movements and store manipulation. Consider liquidity for a form of insurance policy on the store.

Well in the following piece, we’re likely to highlight the 10 most liquid futures around the entire world.

The graph beneath shows the major liquid futures contracts by volume over different futures trades.

Top 10 Liquid Futures Contracts (Across all trades )

If you’re interested in finding probably the most liquid futures contracts special for the Chicago Mercantile Exchange (CME), here you can go.

Top 10 Liquid Futures Contracts (CME Group)

You could be thinking, why highlight the CME? The easy answer – that the CME is just a juggernaut and now I am out of the United States, therefore I want to understand that my regional stores.

To this time I will deliver a thorough summary of each exceptionally liquid arrangement. You need to use this set as being a starting place to ascertain which contract best matches your trading objectives.

  • 2. 10 Year T-Notes (ZN)
    • Maturity Sweet Spot
    • No Physical Delivery
    • Low Commissions
  • 3. Crude Oil (CL)
    • Most Popular Commodity
    • Volatility
  • 4. 5-Year T-notes (ZF)
    • Impact of Federal Reserve
  • 5. Gold (GC)
    • Popular for Hedging
    • Large Tick Size
  • 6. EuroFx (6E)
    • Types of Euro Contracts
  • 7.30-year T-Bonds (ZB)
  • 8. Japanese Yen (6J)
    • Key Characteristics
  • 9. 2-year T-Notes (ZT)
  • 10. Euro Dollars (GE)
  • In Summary
  • 1. S&P 500 E-mini (ES)

    The S&P500 Emini futures contract brings a typical trading volume of 1.6 million trades on any certain day.

    Without any doubtthe S&P500 E-mini futures contracts stand head and shoulders over the others.

    What makes it popular with trade will be the very low stock investing margins and tight tick-size. Maybe not to say that the S&P500 E-mini futures contracts track the inherent S&P500 asset indicator ergo making it effortless for speculators to obtain contact with a number of the popular store indicators.

    Ease of Access

    Due for this S&P500 pretty a lot of trading across the clock, traders located anywhere round the globe have the ability to trade the contract easily.

    Quarter Tick Size

    The little tick size of a quarter point leaves it relatively simple for futures traders to deal with their risks using very little capital requirements.

    Although there’s the normal S&P 500 significant futures , speculators and hedge funds have flocked into the E-mini futures due to the quarter tick.

    For retail traders wanting to obtain going in stocks , the E-mini is ideal since small tick size ergo requires less upfront original financial commitment.

    Technical Analysis

    The S&P500 E-mini contract is known among the very used contracts as soon as it concerns technical investigation. You may become aware of the E-ini contract adheres to vital resistance and support levels.

    This consistent cost movement is sensible because of the very low volatility of this extensive store blended with higher trading volume.

    Once you put both of these things together, it generally contributes to predictable cost patterns.

    2. 10 Year T-Notes (ZN)

    It isn’t surprising to discover the 10-year Treasury note futures position since the number 2 at the set of the top most liquid futures .

    Maturity Sweet Spot

    The 10-year Treasury notice is at a sweet spot Concerning maturity.

    It isn’t too short and so resilient to shortterm rates of interest and at exactly the equal the adulthood isn’t out too far, hence letting the Note to withstand store forces affecting the 30-year.

    No Physical Delivery

    The 10-year T-Note futures monitor the underlying money store of this 10-year Treasury note issued by the U.S. Department of Treasury.

    Futures traders that invest from the 10-year T-Note have the option to take a position on rates of interest and can go short and long together with comparative ease. The difference in the middle the underlying money store and the futures store could be that the contract might be deducted for money, therefore there isn’t any physical delivery of this 10-year T-note.

    While speculators believe it is popular with trade interestrates, traders who’ve actual experience of the inherent store may also market their risks from trading the derivatives contracts of their 10-year T-Note stocks.

    Low Commissions

    The 10-year T-Note stocks arrive with pretty low margin conditions for swing traders along with also the margin requirements for day traders may also be quite competitive.

    3. Crude Oil (CL)

    Most Popular Commodity

    Crude oil stocks arrive as the 3rd most liquid futures and rankings since the before all else one among the commodity futures .

    Crude oil stocks are traded in the New York Mercantile Exchange (NYMEX) area of this CME set and also the futures contract monitors the inherent store of this light sweet crude petroleum using an ticker CL.

    Note that the ICE futures market also supplies crude petroleum futures are very different compared to CL petroleum futures contract.

    Volatility

    Having the average daily trading volume of near 800k, crude petroleum futures result in a thrilling store. Known because of its own volatility and kneejerk responses to news events create crude oil stocks an attractive target for traders.

    The crude petroleum futures trade on monthly basis and roll into the upcoming month.

    4. 5-Year T-notes (ZF)

    Market participants with contact with the bond stores will probably come across the 5-year T-Note stocks a stylish alternate to this 10-year T-Note stocks.

    Impact of Federal Reserve

    The Federal Reserve’s monetary policies have a major influence in the 5-year T-Note stocks like many shortterm rate of interest or even Treasury instruments. The 5-year T-Note stocks are provided by the Chicago Board of Options Trade (CBOT) and therefore are now standardized.

    The entire face value of this 5-year T-Note stocks contract is $100,000, has four contract months and now trades near to 24/7.

    5. Gold (GC)

    Gold futures contracts would be the fifth largest liquid futures and position second among commodities futures. The contract monitors the inherent spot gold stores as well as the futures amounts are shown to store on daily basis.

    Gold stocks possess a normal daily amount of over 300k and therefore are provided by COMEX, a portion of their CME group.

    Popular to Hedging

    Although gold futures are more expensive to trade, they’re a favorite payoff choice against worldwide monies and inadequate store conditions.

    Most of these golden futures contracts are composed of speculators who more often than not would not need some interest in accepting delivery of their metal. There are several diverse variants of gold futures contracts for example mini or micro contractsnonetheless, the normal gold futures contract has become easily the hottest.

    Large Tick Size

    The afternoon trading gross profits to get gold are somewhat high priced, but this doesn’t deter day traders from trading the standard gold futures contracts. Even with a tick size of $10.00, gold futures are still extremely liquid.

    6. EuroFx (6E)

    The CME group offers EuroFX futures or simply Euro futures are part of the currency futures class of contracts. The Euro FX futures rank at number 6 overall and before all else among currency futures.

    The Euro Fx futures contracts or Euro/US dollar futures contracts offers traders an attractive futures contract to gain exposure to the 27-nation single currency. The contracts in the Euro/US dollar are extremely liquid and come in notional values of 125,000.

    Types of Euro Contracts

    There are also other versions of the Euro Fx futures contracts including the E-mini and the E-micro. Still, among the three, the standard euro fx futures contract is the most popular. The Euro Fx futures also come with low day trading margin requirements and for futures traders who prefer to swing trade the contracts; the standard margin requirements are fairly competitive.

    The Euro/US dollar futures contracts come in four quarterly cycles and trades almost 24 hours a day. The Euro Fx futures track the amounts of the underlying spot EURUSD amounts with the contracts being marked-to-market on a daily basis.

    7.30-year T-Bonds (ZB)

    (ZB) 30 Year T-Bond futures cost chart

    Stop Looking for a Quick Fix. Learn to Trade the Right Way

    The 30-year Treasury bond futures, also known as the T-Bond futures represent the 30-year maturity on interest rates.

    The 30-year interest rates are a critical factor for determining key rates such as mortgages.

    30-year T-Bond futures were originally launched in 1977 and are one of the widely traded bond futures contracts across speculators, hedge funds and other store participants.

    The T-Bond futures traders during three contract month periods of June, September, and December with a contract size of $100,000

    8. Japanese Yen (6J)

    Japanese yen futures are the second most liquid currency futures contracts and rank number eight overall.

    The Japanese yen futures contracts give futures traders the exposure to the third largest economy in the world. The yen futures contracts are the inverse of the spot store amounts of USD/JPY.

    The yen futures contracts control a contract size of 12,500,000 with a tick value of $6.25 and have a minimum tick of 0.0000005.

    Key Characteristics

    The Japanese yen is known for its unique characteristic as a safe haven currency.

    It is not just currency speculators who flock to the yen futures contracts but also traders and investors who have exposure to the equity stores. Lastly, the yen currency tends to appreciate during times of developed uncertainty in the stores.

    9. 2-year T-Notes (ZT)

    The 2-year Treasury Note futures track the underlying stores of the 2-year T-note bonds. The futures derivatives are offered on the CBOT exchange and a product of the CME group.

    The 2-year Treasury note is third among the three interest rate futures derivatives.

    The 2-year T-Note futures have quarterly contract months of March, June, September, and December and control a contract size of $200,000 with a minimum tick of 0.0078125 with the dollar value of each tick priced at $15.625.

    10. Eurodollars (GE)

    Eurodollar futures intraday chart

    Eurodollars are part of the interest-bearing bank deposits that are denominated in U.S. dollars but held at banks outside the United States.

    Some investors confuse Eurodollars with Euro fx futures contracts.

    The Eurodollars are attractive for investors due to the fact that they do not fall under the jurisdiction of the Federal Reserve and also come with lower regulations. As a result, the high level of risk makes it attractive for investors, especially those who seek higher yields.

    Eurodollar futures are available 10 contract months with a minimum tick size of 0.0025 with a tick value of $6.25.

    In Summary

    You have a lot of options when it comes to trading futures contracts. Below are a few questions you can ask yourself, which can help with your decision of where to invest.

    1. How a lot of money do you have to invest? Some of the contracts require a larger upfront investment, while others have a low barrier to entry.
    2. What is your local store? This is not a hard fast requirement, but it’s pretty hard to trade Yen futures if you are asleep.
    3. Do you need to hedge against store volatility?Futures are a great way to hedge against a larger cash position. Assess which futures contract will best protect your portfolio.

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