Learn about trading the 45+ DTE income strategy with small accounts using MES Futures. Understand MES micro ES futures and their capital efficiency. Discuss fees, strategies, and maximizing profits. Explore efficient margin usage and expanding book sizes in trading futures.
The MES futures, with their smaller size and lower fees, offer capital efficiency and potential returns for smaller accounts.
Pushing the DTE to 60 days can lead to optimal results when implementing the 45 plus DTE income strategy with MES futures.
Deep dives
Introduction to the 45 plus DTE income strategy for smaller accounts using MES futures
In this podcast episode, the host discusses the implementation of the 45 plus DTE income strategy for smaller accounts using MES or micro ES futures. The host acknowledges that previous strategies were designed for larger accounts with portfolio margin, but with the introduction of micro ES futures, there is potential for smaller accounts to take advantage of capital efficiency. The MES futures are one-tenth the size of ES futures and have a multiplier of five, making them capital efficient. The host highlights the relatively low fees for trading MES futures and emphasizes the importance of pushing the DTE to 60 days to achieve optimal results.
High capital efficiency and potential returns with MES futures
The podcast explores the capital efficiency of MES futures and the potential returns it offers. With a margin requirement of only $400 for a trade, traders can achieve a 63.6% return on capital. The host explains that even allocating only 40% of capital can generate a 25% return on the account. The episode also discusses the importance of leaving ample buying power available to account for potential buying power expansion.
Considerations and limitations of trading MES futures
The podcast highlights a few considerations and limitations when trading MES futures. It mentions the importance of liquidity, as the liquidity of MES futures may vary. The host suggests manually managing positions due to the slow-moving nature of the 45 plus DTE strategy. Additionally, the episode mentions that most brokers do not offer stop orders on futures, thus requiring traders to manage positions manually. Finally, the host encourages starting small and invites listeners to provide feedback on their experiences with trading MES futures.