Dow Futures Contract Size and Specifications Explained
Introduction
If you’re planning to trade Dow futures, it’s important to understand the exact details of the contract you’re dealing with. From the Dow futures contract size to the margin requirements and tick values, this guide breaks down all the key specifications you need to know—especially if you’re a beginner.
What Are Dow Futures Contracts?
Dow futures are financial agreements to buy or sell the Dow Jones Industrial Average at a future date for a predetermined price. These contracts are traded on the CME (Chicago Mercantile Exchange) and are widely used by retail and institutional traders to speculate or hedge against market movements.
Dow Futures Contract Types
There are two primary Dow futures contracts you’ll encounter:
- E-mini Dow Futures (Symbol: YM)
- Most commonly traded version
- Great for intermediate and active traders
- Micro E-mini Dow Futures (Symbol: MYM)
- Launched to make futures more accessible
- Ideal for beginners and small accounts
Dow Futures Contract Size Comparison
| Contract Type | Ticker | Multiplier | Typical Notional Value |
|---|---|---|---|
| E-mini Dow Futures | YM | $5 × DJIA Index | ~$180,000 (when DJIA is 36,000) |
| Micro E-mini Dow Futures | MYM | $0.50 × DJIA Index | ~$18,000 (at DJIA 36,000) |
Note: Notional value = index price × contract multiplier
Minimum Tick Size and Value
Each Dow futures contract moves in minimum increments called ticks.
- E-mini (YM):
- Minimum Tick: 1 point = $5.00
- Micro E-mini (MYM):
- Minimum Tick: 1 point = $0.50
This means even small price movements can impact your profit or loss depending on the contract you trade.
Trading Hours (CME Group)
Dow futures are available almost 24 hours a day:
- Sunday to Friday: 6:00 PM to 5:00 PM (EST)
- Daily 1-hour break: 5:00 PM to 6:00 PM (EST)
This allows you to react to global news even when the stock market is closed.
Margin Requirements
Margin is the amount you need in your account to open and hold a position:
- E-mini YM Initial Margin: ~$7,000 (varies by broker)
- Micro MYM Initial Margin: ~$700–$1,200
Tip: Always check your broker’s updated margin requirements—they can change based on market volatility.
Why Contract Size Matters
Understanding contract size helps you:
- Choose the right product for your risk profile
- Scale your positions based on account size
- Estimate your potential profit and loss per trade
If you’re new, start with Micro contracts to manage risk and build experience.
Conclusion
Knowing the Dow futures contract size and other specs is a key step before placing your first trade. Whether you’re using the E-mini or Micro E-mini contract, being familiar with tick value, margin, and trading hours will help you plan your trades more effectively. Choose the right size for your goals and stay within your risk limits.
FAQs
Q1. What’s the contract size of E-mini Dow futures?
$5 × the current Dow index value. If the index is 36,000, the contract size is $180,000.
Q2. What is the difference between E-mini and Micro E-mini contracts?
Micro contracts are 1/10 the size of E-minis, making them more accessible for small accounts.
Q3. How much money do I need to trade Dow futures?
Micro Dow futures may require around $700 to start; E-minis may require $7,000 or more depending on your broker.
Q4. Can I hold Dow futures overnight?
Yes, but ensure you meet the overnight margin requirements and understand the risks involved.
Q5. Are Dow futures suitable for beginners?
Micro contracts (MYM) are beginner-friendly due to their smaller size and lower risk exposure.
