The following is an extract from an article published by PortaraCQG to read the original article see: Mini vs Micro Futures Contracts β Whatβs The Difference?.
Many traders find themselves debating between either mini or micro contracts. Knowing the key differences and features of each can help you decide which is best for your needs.
What Are Mini Contracts?
Mini futures have a smaller contract value than their full size contracts. Mini futures contracts usually represent either 10 or 20 times the size of a single underlying contract. Given their larger size, they are ideal for experienced traders who can handle a greater degree of risk. Because of this, mini futures contracts tend to trade with more open interest and greater liquidity.
What are Micro Contracts?
Micro futures contracts are a smaller version of the mini futures contracts and allow traders to access smaller market movements. They usually represent 1/10th or 1/20th of a single underlying contract, providing leverage that can make money management easier. Some exchanges have recently introduced even smaller micro-lots, representing just 1/50th of an underlying contract size. This makes them perfect for traders who want to trade with greater precision while managing risk and avoiding larger positions sizes.
Conclusion
When trading mini futures and micro futures, itβs important to consider the right sizing and risk management techniques. For instance, small price movements in mini futures may cause greater losses or profits compared to micros due to the relative large size of mini contracts.
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