S&P 500 futures contract

Futures contract on a stock

In finance, a single-stock future (SSF) is a type of futures contracts between two parties to exchange a specified number of stocks in a company for a price agreed today (the futures price or the strike price) with delivery occurring at a specified future date, the delivery date. The contracts are traded on a futures exchange. The party agreeing to take delivery of the underlying stock in the future, the "buyer" of the contract, is said to be "long", and the party agreeing to deliver the stock in the future, the "seller" of the contract, is said to be "short". The terminology reflects the expectations of the parties - the buyer hopes or expects that the stock price is going to increase, while the seller hopes or expects that it will decrease. Note that the contract itself costs nothing to enter; the buy/sell terminology is a linguistic convenience reflecting the position each party is taking (long or short).

SSFs are usually traded in increments/lots/batches of 100. When purchased, no transmission of share rights or dividends occurs. Being futures contracts they are traded on margin, thus offering leverage, and they are not subject to the short selling limitations that stocks are subjected to. They are traded in various financial markets, including those of the United States, United Kingdom, Spain, India and others. South Africa currently hosts the largest single-stock futures market in the world, trading on average 700, 000 contracts daily.

SSFs in the U.S.[edit]

In the United States, they were disallowed from any exchange listing in the 1980s because the Commodity Futures Trading Commission and the U.S. Securities and Exchange Commission were unable to decide which would have the regulatory authority over these products.

Research and Markets: Global Acrylic Acid Market (Derivatives Types, End ..  — Business Wire
According to the new report titled "Global Acrylic Acid Market (Derivatives Types, End Users and Geography) - Industry Analysis, Trends, Share, Opportunities and Forecast, 2013 - 2020", the global acrylic acid market is forecast to reach $18.8 billion ..

Popular Q&A

avatar
What does future contracts trading in the stock market have in relationship with ancient Greek mythology?

While I've found reference to the stock market at Greek mythology sources, I can find no comparison between the two.

Related Posts