Micro e-mini futures are a form of stock trading that has become increasingly popular in Singapore. Micro e-mini futures are derivative instruments that are a fraction of the size of regular futures contracts, allowing traders to take positions in different markets with reduced risk and lower capital requirements than larger contracts. These contracts allow investors to take on greater risk with lower capital requirements and allow them to leverage their portfolios for higher returns.
They also provide more flexibility than traditional stocks and other assets, allowing traders to speculate on multiple markets simultaneously. As such, micro e-mini futures have become an essential tool for many successful investors.
How to use micro e-mini futures in Singapore
If you’re looking at making more money with fewer risks, micro e-mini futures might be the right choice. To trade them, you’ll need to learn the basics and understand how they work in stock trading.
Educate yourself on the market
The first step in using micro e-mini futures is to educate yourself about the underlying asset or index you intend to trade. You must understand how it works and its historical performance in various market environments. Micro e-mini futures work differently from regular futures because they are much smaller, so you should ensure that the risks and rewards are understood to get the most from them. When trading micro e-mini futures, you should familiarise yourself with the order types and related fees.
Set up your trading account
After familiarising yourself with micro e-mini futures, you will need to set up a trading account with a broker like Saxo to start trading. You can either open a standalone futures account or use your existing stockbroker that offers micro e-mini futures. Whichever you choose, make sure to do your research and find out what fees they charge and which markets they offer.
Find the right trading strategy
Once you’ve set up your account, it’s time to find a suitable trading strategy that works for you. To do this, you’ll need to analyse market conditions and devise a plan based on what is happening in the markets. It will involve understanding the fundamentals of micro e-mini futures and then applying technical analysis to spot potential opportunities. When trading micro e-mini futures in stocks, you should pay attention to the news, as any economic or corporate developments could impact stock prices.
Choose a broker and research market makers
When trading micro e-mini futures in stocks, you must select a broker that provides market access. You should research their fees and ask for advice from experienced traders before deciding. You should also research market makers who provide liquidity on derivatives exchanges like Binance Futures. It is crucial because it’s likely that these market makers will affect the price of the contracts, so you want to ensure they’re reliable and trustworthy before trading with them.
Monitor your positions
Once you’ve opened your micro e-mini futures contract position, you’ll need to monitor it closely. You should set stop-losses and take-profits orders as needed, depending on the market conditions and your risk appetite. Stay up to date with market developments, as this will help you make better decisions about when to close positions or open new ones. In addition, you should review your trading activity regularly to assess whether your chosen strategy is working and make any necessary adjustments.
Benefits of using micro e-mini futures in stock trading
There are several benefits of using micro e-mini futures in stock trading. You need to be aware of these to take full advantage of them and ensure you make the most of your trades.
Lower risk
One of the main benefits of using micro e-mini futures is that they offer lower risk than traditional stocks because the contracts are minor, so you can reduce your exposure and still achieve a significant profit potential.
Leverage
Another advantage of trading micro e-mini futures in stocks is leverage. You can use leverage to increase your buying power, allowing you to take more significant positions with meagre capital requirements.
Tax advantages
There are tax advantages associated with trading micro e-mini futures in Singapore. As they are considered derivative products, these contracts fall under different regulations and tax rules than stocks and may offer some tax advantages. Be sure to check your local regulations for more information on this.
