Equity Index Futures: E-mini and Micro Contracts Compared

Before you read: Futures Trading Hours, Settlement Prices and Price Limits

What you will learn

• What a stock index future tracks and how it relates to the index and to ETFs on the same index.
• How the common E-mini and Micro E-mini contracts on four US indexes compare in size.
• What fair value and the basis are, and why a futures price is rarely equal to the index level.

What does an index future track?

Can you buy an index? If not, what are you trading?

A stock index is a number calculated from the prices of a basket of stocks. You cannot buy the number itself, but you can trade products whose value is tied to it. Index futures are one such product: each contract is worth a fixed dollar amount times the index level, and it settles in cash against the index at expiration. ETFs that track the same index are another. The ETF holds the stocks; the future is an agreement about the index’s value on a date.

In the United States, four broad indexes have widely traded futures listed by CME Group: the S&P 500 (large companies across sectors), the Nasdaq-100 (100 of the largest non-financial companies listed on Nasdaq), the Dow Jones Industrial Average (30 large companies, price-weighted) and the Russell 2000 (smaller companies).

How do the contracts compare?

If two contracts track the same index, what makes one ten times larger than the other?

Each index has a standard E-mini contract and a Micro contract one-tenth its size:

The tick size is the same for the E-mini and its Micro. Only the dollar value per point changes. So the price chart of NQ and MNQ looks the same, but a 10-point move is $200 per NQ contract and $20 per MNQ contract.

The notional value differs a lot between indexes because the index levels differ. To compare exposure, multiply the index level by the multiplier. For example, at a hypothetical Nasdaq-100 level of 20,000, one NQ controls 20,000 × $20 = $400,000. At a hypothetical S&P 500 level of 6,000, one ES controls 6,000 × $50 = $300,000. Same idea, different sizes.

Index futures diagram

Illustrative diagram constructed for teaching. Not real market data.

The diagram lines up each E-mini with its Micro: the same tick size, with each Micro tick worth one-tenth of the E-mini tick. It is constructed for teaching and is not real market data.

What are fair value and the basis?

Why does the futures price usually sit a little above or below the index?

Holding a futures contract is economically similar to holding the stocks in the index, with two differences. The futures holder has not paid for the stocks, so they keep the cash and can earn interest on it, and they do not receive the dividends the stocks pay. A theoretical fair value for the future adjusts the index level for these two effects up to expiration. When interest rates are above the dividend yield, fair value sits above the index; when they are below, it sits below.

The basis is the difference between the futures price and the index. It shrinks toward zero as expiration approaches, because at final settlement the contract is valued at a special index value calculated from the opening prices of the index’s stocks on expiration day. This is why index futures and the index can open at different-looking levels, and why news shows sometimes quote futures “relative to fair value.” The gap is mostly carry, not a forecast.

How do index futures relate to ETFs?

If an ETF and a future track the same index, why choose one or the other?

They share the underlying but differ in structure. The future uses margin and leverage, trades nearly around the clock, expires and must be rolled, and settles in cash. The ETF is a share you can own outright, trades mainly during stock-market hours, collects dividends (which the fund may distribute) and does not expire. Contract size also differs: one ETF share is worth a small fraction of one E-mini contract. Neither is better in general. They are built for different uses.

What this does not tell you about index futures

• Contract terms, including multipliers, ticks and trading hours, are set by the exchange and can change. Check the exchange’s current specifications.
• Fair value depends on interest rates and expected dividends, which change. Published fair values are estimates.
• An index future’s price says nothing reliable about where the index will open or close.
• Notional examples in this lesson use hypothetical index levels, not current prices.

Check yourself

1. One NQ contract and one MNQ contract both move 15 points. What is the dollar change for each? Hint: points × dollars per point.
2. Why does the basis shrink to zero at expiration? Hint: what is the final settlement based on?
3. Two traders each hold one E-mini, one on the Russell 2000 and one on the S&P 500. Do they have the same exposure? How would you check? Hint: notional value = level × multiplier.

Trademark note. S&P and S&P 500 are trademarks of Standard & Poor’s Financial Services LLC. Dow Jones and Dow Jones Industrial Average are trademarks of Dow Jones Trademark Holdings LLC. Nasdaq-100 is a trademark of Nasdaq, Inc. Russell 2000 is a trademark of the London Stock Exchange Group plc group of companies. E-mini and CME Group are trademarks of Chicago Mercantile Exchange Inc. Socratic Trading Academy is not affiliated with, sponsored by or endorsed by any of these companies.

Last reviewed November 9, 2026. Spotted a mistake? Report an error.