One futures contract, long or short. There is no premium, no strike and no decay — the payoff is a straight line through the entry price — so everything about the position comes from contract size and leverage. An E-mini S&P contract carries index exposure of fifty times the index level on margin worth a small fraction of that, and the same arithmetic runs in both directions with nothing to soften it. Losses are not bounded by what was posted, and variation margin settles in cash daily. Set the contract and the move here, then read what a single point is worth before deciding how many to hold.
The simplest futures order there is: one contract, one side, no strike and no expiry decision beyond which delivery month to hold. The real decision is the roll — most participants close the position before first notice date and open the same size in the next active month, and the cost of that roll is set by the calendar spread between the two months, not by anything on this ticket. Check the contract's tick size and point value before sizing; they vary by product and are not the same across the futures listed here.
Position size in futures is naturally set by the number of contracts, and one contract is already a large notional exposure on most index and commodity products — sizing by 'how many contracts feels comparable to my usual stock position' routinely produces far more leverage than intended. Daily variation margin means a losing position generates real cash calls before the trade thesis has had time to play out, so the account needs spare cash beyond the initial margin, not merely the initial margin itself. Stop orders on futures execute continuously through the overnight session, unlike many equity accounts' day-session-only stops.
Common mistake. The common mistake is sizing contracts by how a position 'feels' relative to an equity account rather than by the actual notional and point value, which is routinely far larger than it appears.
| # | Action | Instrument | Strike |
|---|---|---|---|
| 1 | Buy | ES future | 5800 |
Computed from the same strikes and net premium as the worked example above — not a simulation, the closed-form payoff evaluated at each price.
| ES at expiry | P&L |
|---|---|
| 5600 | -$10000.00 |
| 5700 | -$5000.00 |
| 5800 | $0.00 |
| 5900 | $5000.00 |
| 6000 | $10000.00 |
| 6100 | $15000.00 |
| Strategy | Market view | Opened for | Legs vs. this one |
|---|---|---|---|
| Futures Spread | Relative value — non-directional | Margin | +1 |
| Futures Calendar Spread | Term structure — non-directional | Margin | +1 |
| Covered Futures Call | Neutral to mildly bullish — futures income | Margin | +1 |
| Futures Basis Trade | Arbitrage — carry capture | Margin | +1 |