E Mini payoff

[b521040010]

Hi guys,

I am a newbie in trading and never trade before, yet I am doing a Phd in Financial Maths.

I am constructing an algo trading using math models.
However, I am unsure about E mini Future written on S&P 500.

I have been reading some articles but I am still unsure. Hope you guys can help me out.

When I look at E mini SPX500 on Bloomberg terminal, there are bid and ask prices.
As I understand, to enter the position we do not need to pay anything (I do not take margin, commissions, etc. into account).

The payoff for going long one contract is (Index value at Maturity-askprice)*50, whereas the payoff for going short one contract is (bidprice-Index value at Maturity)*50 assuming that I will hold it until maturity no matter what.

I just want to know if I understand it correctly.

Thank you

 

[Overnight]

...
However, I am unsure about E mini Future written on S&P 500.
...

...that I will hold it until maturity no matter what....

Hmm. Futures do not "mature", they "settle" each day at a certain price. Then there is the "last trade date", after which they can no longer be traded. At that point, settlement procedures kick in.

I *think* what you're asking is if the future settles any different than the underlying? If so, then I guess, yes. Like the Dow E-Mini (YM). It is currently trading about 10 points below the underlying....?

Nevermind, I am lost on your question.

 

[caacapital]

Each 1 point(4 tick) move is $50 each tick is $12.50 you are paying a something either opportunity cost(waiting for an aggressive order to fill you) or the bid-ask spread(jumping the bid-ask spread ie) paying 1 tick more than what others are willing to pay)

Hi guys,

I am a newbie in trading and never trade before, yet I am doing a Phd in Financial Maths.

I am constructing an algo trading using math models.
However, I am unsure about E mini Future written on S&P 500.

I have been reading some articles but I am still unsure. Hope you guys can help me out.

When I look at E mini SPX500 on Bloomberg terminal, there are bid and ask prices.
As I understand, to enter the position we do not need to pay anything (I do not take margin, commissions, etc. into account).

The payoff for going long one contract is (Index value at Maturity-askprice)*50, whereas the payoff for going short one contract is (bidprice-Index value at Maturity)*50 assuming that I will hold it until maturity no matter what.

I just want to know if I understand it correctly.

Thank you