Believe it or not, we get calls all the time asking this one simple question, so we thought we would answer it quickly for you right now in this short article. There is one day once a quarter where the market (stock index futures contracts that is) does not seem to move very much. Guess what day that is? Yes, you’re right, it is the first day when the next (active) contract month starts trading.
I know this sounds basic, but most people that have not been trading for very long don’t know when to switch over to the next contract month. For experienced traders, a recap of when to switch over is good to keep in mind. Let me quickly recap what the four trading months are for the index futures contracts, such as the E-Mini S&P 500, Dow Futures, Russell, Nasdaq, etc. and exactly when to switch over to the next active contract month.
You want to switch over on the Second Thursday Of The Expiration Month. This means you start trading the March (H) contract the second Thursday of December. Start the June (M) contract on the second Thursday of March. Start trading the September (U) contract on the second Thursday of June. Start the December (Z) contract on the second Thursday of September.
That’s all there is to it. Most beginner traders do not know this though, that is why I decided to put this in here. This is obviously very important to know if your long-term goal is to trade for a living.
Yours in Trading Success,
Todd Mitchell