Page 176 - THE MARKET WHISPERER

172 PART 6 - Indices, Sectors And Crystal Balls

real volatility. This illusion, accompanied by the thrill it arouses of seeing
money in the account, attracts “gamblers” who usually very quickly lose
their money. Veteran traders like me also trade (but not exclusively) in
futures. I would recommend that novice traders with less than three years’
experience do not even try. Everything in its own good time, and patience
pays off.

What is the ES Symbol?

Futures expire every three months, at the end of the third Friday of any
quarter. Simultaneous to their expiration, new futures contracts are being
formed and traded: their expiration date will be at the end of the third
Friday of the next quarter. Unlike a stock which carries a fixed symbol,
each future has its own symbol. Your broker can help you find the current
symbol of a future, but you can also do that yourself, as will be explained.

An example of a futures symbol with an expiration date of the first
quarter of 2013 would be /ESH3.

Explanation of the Symbol
The slash always precedes the letters “ES,” which are the two letters in

the symbol that will never vary. The “H” represents the quarter, which in
this case is the first quarter of the year, i.e. this future expires at the end
of March. The digit indicates the year, i.e. 2013. The digit will always be
single: 3 is 2013, 4 will be 2014, 5 will be 2015, etc.

The quarters are represented as follows:
H – futures contracts expiring at the end of March
M – futures contracts expiring at the end of June
U – futures contracts expiring at the end of September
Z – futures contracts expiring at the end of December
I taught myself to remember which letter represents which quarter by
linking it with the name of a much loved food, “hummus,” as well as the fact
that the letters are in alphabetic order.
Question: It is currently September 2, 2013, and you wish to view the
relevant futures charts. What symbol will it carry?
Answer: You can already view futures expiring in December 2013,
but they will show lower liquidity than those expiring in September, and
therefore you will choose futures expiring in September. After the third
Friday in September, all trading volume will be on the December contract,
although most professionals “roll” to the new contract more than a week
before expiration.