Hacker Newsnew | past | comments | ask | show | jobs | submitlogin

eli5, pls?


They are using leverage via futures contracts to grow their portfolio.

The average person would be unlikely to be able to stomach holding a contract as each one moves the same as holding ~$250,000 of the S&P500. You get this by putting ~$25k down. A 10% move down and you are wiped, a 10% move up and you double your money.

However they do offer micro contracts which are $25,000 of S&P500 for ~$2,500.


To add a little more detail, ES is the e-mini S&P 500 futures contract traded on the CME. The way it works is that you put up some amount of money called the "margin", and you get to buy or sell a larger "notional" valued contract. The difference between the margin that you put up and the greater notional value is the implicit leverage that parent comment refers to.

You can find the contract specs on the CME's website here [0]. The implicit leverage is actually a bit greater than the parent comment says. The contract notional value is defined as $50 x Index Value, which is currently around 6500. So the contract represents close to $325,000 and the exchange's margin requirement is around $21,000. Interactive Brokers seems to require similar margin [1]. The margin requirement is around 6.5% of the notional value, i.e. 15x leverage. So a 6.5% decrease in the S&P 500 would wipe out the account.

Not sure why the parent comment is downvoted, I suppose it has a moralizing tone?

[0] - https://www.cmegroup.com/markets/equities/sp/e-mini-sandp500...

[1] - https://www.interactivebrokers.com/en/trading/margin-futures...


I go long on S&P 500 futures. Max 5 contracts. I keep a tight stop (profit% - loss% = 10%) in case another deepseek happens. When contract loses volume, I sell it and buy the next front month one.


What platform are you using?


personally, IB




Consider applying for YC's Winter 2026 batch! Applications are open till Nov 10

Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: