The road to mini-success. (Online Trading).

Electronically traded mini futures contracts, such as the E-mini S&P 500, have become one of the industry's success stories. Combined with the fast-growing popularity of online regulated forex trading in general, is that an indication that the new mini-FX accounts being offered also could

A standard full-sized forex lot is 100,000 currency units. Mini-FX accounts are one-tenth the size, or 10,000 currency units. Brokers say these smaller accounts are designed for those new to online currency trading and those with limited capital. Coupled with the low margins of most e-forex firms - as low as 1% - the capital commitment for a single mini-FX trade can be quite low. Likewise, the minimum amount required to open a mini-FX account, although it varies by firm, is far less than that of a regular forex account.

Of course, as with other mini accounts, in commission trades you're usually paying the same rate for what amounts to less exposure - something that should usher mini-FX traders into regular accounts as they do well.

The first currently registered forex FCM to offer mini-FX accounts did so shortly after registration was first required. In February 2001, Forex Capital Markets (FXCM) rolled out its products, but it didn't see significant growth until after regulation started to take hold in the industry. The Commodities Futures Modernization Act (CFMA), passed just two months earlier, gave legitimacy to retail forex trading by requiring firm registration and giving the Commodity Futures Trading Commission oversight of these markets. Now several registered forex FCMs offer mini-FX accounts (see "Who's on board").

Marc Prosser, chief marketing officer of FXCM, says mini-FX trading accounted for less than 2% of FXCM volume in 2001. In 2002 it was about 6%, and he estimates for 2003 it will be between 12% and 15%. He says that FXCM currently has more than 6,000 active mini-FX accounts.

The statistics suggest that a growing number of traders are unfamiliar with currency trading or are not willing to put up the big money it costs to trade currencies, yet are still interested in trading them. The lower risk of mini accounts is behind their attractiveness, according to brokers.

"Given the average day in the market, the range of tick movement for the euro is about 100 ticks," Prosser says. "If you're starting out with an account with only $3,000-$4,000, you're probably in a much more comfortable position taking a $100 gain or loss than with a $1,000 fluctuation."