E-Mini Investors Should Guard Against Risks: Securities Attorneys

E-Minis investments typically present risks to some investors that may not be properly disclosed by those recommending such investments, cautioned securities lawyers Jason Kane and Joe Peiffer.

E-Minis are electronically traded futures contracts that correspond to a percentage of a standard futures contract. E-Minis offer investors a way to trade on an index without using extremely high multipliers. For example, when the E-Mini first came into existence in 1997, the S&P contract was $500 x the index (which at the time equated to over $500,000). This cost made trading indexes cost prohibitive to investors.

However, the multiplier now used for the E-Mini S&P 500 is $50. The E-Mini Dow ($5) Futures uses a multiplier of $5. E-Minis allow more investors to trade futures contracts tied to an index.

One of the allures of E-Minis is the volatility of the indexes. Volatility is a built-in feature of these investment products, as it allows investors to make money by either buying long on an investment or selling short the investment.

A lack of volatility would decrease the chances of an E-Mini investor quickly making a profit. However, for conservative investors, such volatility presents a risk that is unsuitable for their investment strategies.

E-Minis also present a risk to conservative investors due to the high leverage involved. Depending on the index and the multiplier used, investors stand to gain a considerable amount of money or lose a considerable amount of money. For example, if the value of the contract is worth $100 times the index, then the investors gains $100 for every point the index goes up. Conversely, for every point the index decreases, the investor loses $100 for each point that the index decreases.

E-Minis may not be the best investment choice for a conservative investor due to volatility and leverage.

The Peiffer Rosca securities attorneys often represent investors who lost money as a result of broker misconduct or investment fraud.  They are investigating the E-Minis sales practices of a number of investment professionals and are preparing to take action on behalf of any victimized investors.

The Peiffer Rosca attorneys typically represent victimized investors on a contingency fee basis.  They advance the case costs and only get paid for their contingency fee and case expenses if and when they recover compensation for their clients.  The fees are calculated after case expenses are deducted from the recovery.

Investors who believe they lost money as a result of investing in E-Minis recommended by their investment professionals but poorly explained may contact attorneys Jason Kane or Joe Peiffer for a free, no-obligation evaluation of their recovery options at (585) 310-5140 or by using the contact form on this blog.

Peiffer Wolf (1249 Posts)

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